National Flood Insurance Program “NFIP” 2.0 and its effect on Florida Real Estate
With the April 1st FEMA renewal date just a few weeks away, what can YOU do to protect yourself?
FEMA Risk Rating 2.0 Facts:
- Starting April 1st, Risk Rating 2.0 will be applied to all existing policies in the 2022 renewal cycle.
- Risk Rating 2.0 prices properties by individual property, based on elevation, distance to water, replacement cost
- Per FEMA, 80% of all Florida FEMA policies will see a price increase
- While pricing is likely to go up for most of the renewals, FEMA has capped the increase in any one year at 18%.
- If on Special Flood Hazard (AE, AH, VE), flood insurance is still required for a mortgage.
- A seller with an existing FEMA policy can assign a policy in good standing to a new owner prior or at close of the sale — could be huge savings for all involved.
- Elevation Certificates are now optional (because elevation data is part of the Risk Rating 2.0 model) — yet may be used to bring down the cost of flood insurance.
For those with existing FEMA Policies:
- Your current FEMA policy rate will be ‘Grandfathered’ in as the base price.
- FEMA will price your current property with Risk Rating 2.0 pricing upon your renewal date (April 1st or after).
- While you may see an increase in your FEMA policy, FEMA will cap any price increase at 18% increase per year.
- That said, your FEMA pricing will escalate at that 18% renewal yearly until it hits the new FEMA market price.
- If you have a decrease, you will see that immediately in your pricing at the new Risk Rating 2.0 decreased price.
Here are 3 Actions that you can take TODAY:
- Check your zip code on FEMA’s Website: Link HERE
- Look at your current policy to determine whether you have an existing National Flood Insurance Policy.
- If it’s for a home you’re considering purchasing, ask your real estate agent to get a quote on the cost of Flood Insurance in Florida.
Do you still have questions? Connect with a local real estate expert today to answer your questions and help you find a great home with Flood Insurance in Florida in mind.