On Thursday, the Federal Emergency Management Agency (FEMA) announced that it would delay the implementation of new National Flood Insurance Program (NFIP) rates, which had been scheduled to become effective October 1, 2020 - just before next year’s general elections. Instead, the new rates are now set to take effect on October 1, 2021.
The new rates will be calculated based on FEMA’s Risk Rating 2.0 initiative, which is intended to modernize the system by which the NFIP assesses risks and sets rates for millions of flood insurance policyholders across the country. Risk Rating 2.0 is meant to provide a more accurate picture of exposures facing individual properties. It will, most likely, lead to higher flood insurance rates for some homeowners and lower rates for others.
Legislation pending in Congress, sponsored by New Jersey Congressman Frank Pallone and our U.S. Senator Bob Menendez, would cap any rate increase to less than 10 percent.
The NFIP has, for over a year now, been kept alive by a series of temporary reauthorizations. The latest installment is set to expire on November 21, 2019 – the same date on which the Continuing Resolution, currently keeping the Federal government in operation, is set to expire. Absent action on the NFIP, current coverage would remain in place, but no new policies could be written.
We will continue to follow developments and strive to keep you posted.
Contact: Jon Moran, Senior Legislative Analyst, email@example.com, 609-695-3481 x121.