So it looks like after years of kicking the can down the road congress is moving forward with BIG changes to the National Flood Insurance Program and it will affect Florida real estate. The new system is called “Risk Rating 2.0” and so far what I’ve heard I’m not a fan of it it for this reason: In a government subsidized program there should be transparency in how rates and premiums are calculated and this system is black magic that will be hidden behind the proprietary information veil of super secrecy.
The Congressional Research Service issued this report on Jan 2021.
Like it or not this IS being rolled out and is now set to take effect on 1 October 2021. They state from the web site for this program that…
“Risk Rating 2.0 will comply with existing statutory caps on premium increases. Risk Rating 2.0 will prevent significant premium increases by offering a glidepath discount to existing policyholders and new homeowners buying homes from existing policyholders.”
And the report linked to above notes a BIG thing for us…”Risk Rating 2.0 will not be able to increase rates faster than the existing limit for primary
residences of 5%-18% increase per year”.
WHAT DOES THIS TELL ME? IF YOU DO NOT ALREADY HAVE A FLOOD POLICY GET ONE. ONCE YOU HAVE THIS YOUR RATES CAN ONLY GO UP BY SO MUCH EACH YEAR.
