Pew, Diverse Organizations Support Prompt Launch of New Federal Flood Insurance Rating System

Improved methodology means more than a million policyholders will have lower premiums

Support the New Federal Flood Insurance Rating System

On Sept. 17, 2021, The Pew Charitable Trusts, along with organizations representing fiscal conservatives, environmental groups, the reinsurance industry, and others, sent a letter to U.S. Senate and House of Representatives leadership urging implementation of “Risk Rating 2.0,” the Federal Emergency Management Agency’s modernized rate-setting system for National Flood Insurance Program policies, as scheduled on Oct. 1. The letter emphasized that the new methodology will provide more accurate and equitable rates for property owners, and unlike the existing rating system, which would lead to rate increases for all policyholders, will make nearly 1.2 million policyholders eligible for decreased premiums. Additionally, almost 90% of policyholders will see either decreases or monthly increases of $10 or less beginning in 2022.

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Flooded neighborhood
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FEMA's New Flood Insurance Policy Is Fairer

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For decades federally backed flood insurance rates have been calculated using a dated system, based on an old understanding of flood risk. What that has meant is that some policyholders covered by the National Flood Insurance Program (NFIP) whose properties have lower flood risk have been paying too much while others with higher flood risk haven’t been paying enough.

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Flooded community

The National Flood Insurance Program

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More than half a century after its creation, the National Flood Insurance Program (NFIP)—which provides federally backed coverage for homeowners and small businesses in 23,000 communities—is failing to meet its goals of lowering federal spending on disaster response and improving flood plain management.

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Agenda for America

Resources for federal, state, and local decision-makers

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Data-driven policymaking is not just a tool for finding new solutions for emerging challenges, it makes government more effective and better able to serve the public interest.