Risk Rating 2.0, aka RR2.0, Information

The RR2.0 is moving all policies to actuarial rates or true risk rates.

Over the last 50 years, FEMA has collected $60 billion in NFIP premiums, but has paid $96 billion in costs (including losses, operating expenses, and interest). Taxpayers and policyholders are adversely impacted when the program does not generate the revenue needed to pay claims. Risk Rating 2.0 will help put the NFIP on solid financial footing by creating a more stable program that is accountable to taxpayers.

The program is being phased in

• In Phase I: New policies beginning Oct. 1, 2021, will be subject to the new rating methodology. Also beginning Oct. 1, existing policyholders eligible for renewal will be able to take advantage of immediate decreases in their premiums.
• In Phase II: All remaining policies renewing on or after April 1, 2022, will be subject to the new rating methodology.

The CRS discount will be available for all flood insurance policies in the community provided they meet the minimum requirements.

When property owners take steps to mitigate their property, flood insurance policyholders may receive a reduced premium. Mitigation efforts, such as elevating a building or installing proper flood openings in a crawlspace or garage, can help to reduce flood damage and potentially decrease the cost of flood insurance.

For more information on RR 2.0 please go to https://www.fema.gov/flood-insurance/risk-rating

Basics

Flood Insurance is available in Sarasota County through the National Flood Insurance Program and can help you recover from a disaster.

Flood insurance protects you from the financial devastation caused by floods. Even a few inches of water can bring thousands of dollars in repair and restoration costs. Most homeowners insurance does not cover floods.

Flood insurance is single peril insurance, sold separately from homeowners insurance. Flood insurance protects against losses to buildings and their contents, not the land surrounding them.

The coverage applies whether the flooding results from heavy or prolonged rains, coastal storm surge, blocked storm drainage systems, or other causes. To be considered a flood, the waters must cover at least two acres or affect at least two properties.

Availability

Flood insurance is available both within and outside of floodplains. Your property's flood risk is shown on flood hazard maps. Different types of policies are available depending on your flood risk.

If you live in a high-risk area, you will need a Standard Policy. Most mortgage lenders will require that you have such a policy before they will approve your loan.

Outside of high-risk areas, flood insurance is also available, usually at lower cost. While you aren't federally required to have flood insurance in a low-to-moderate risk area that does not mean that you won't ever need it. Large floods often extend beyond the boundaries of high-risk areas and smaller floods occur outside high-risk areas as well. In fact, a quarter of all flood insurance claims come from low-to-moderate risk areas.

Waiting Period

There is usually a 30-day waiting period, after applying and paying the premium, before the flood insurance policy becomes effective.

However, there is no waiting period when flood insurance is required by a lender for any purpose. Lenders may require flood insurance for a new loan, when a loan amount is increased or extended, or after a mortgage portfolio review shows that the building is in a high-risk area.

There is a one-day waiting period for a new policy or when additional amounts of coverage are required by the lender during the 13-month period following map revisions. This applies when the map revision changes the structure's designation from a non-high-risk area to a high-risk area.

Cost and Coverage

Flood insurance is sold and serviced by private insurers and backed by the federal government. More then 50 companies and thousands of independent agents sell flood insurance. Often the same insurance agent who wrote your homeowners insurance policy can help you obtain flood insurance.

Flood insurance costs the same wherever you purchase it because the rates are set by the National Flood Insurance Program.

Flood insurance covers homes, renters, and businesses. With residential coverage you can get up to $250,000 of insurance to protect your home and up to $100,000 to protect its contents. If you are located in (or moving into) a high-risk area, federally regulated or insured lenders will require you to have flood insurance for the amount remaining on your mortgage, or $250,000, whichever is lower. With commercial coverage, you can get up to $500,000 of insurance to protect your building and up to $500,000 to protect its contents. If you are a renter, you can get flood insurance for the contents of your home.

Get the coverage that’s right for you.

Whether you’re a homeowner, business owner, or renter, the NFIP offers flood insurance coverage to help you protect the life you’ve built. Work with your insurance agent to learn more about coverage amounts, deductibles, and policy costs.

Be flood smart. Find out about your property and contact an insurance agent by visiting FEMA National Flood Insurance Program.