Tag Archive for: NFIP

New Interactive Maps Show Flood Insurance Premium Changes With Risk Rating 2.0

Starting Oct. 1, FEMA’s new Risk Rating 2.0 will fundamentally change the way FEMA rates a property’s flood risk and prices insurance premiums. But to what extent will that affect premium changes in your area?

To help answer that question, the American Society of Flood Plain Managers (ASFPM) and The Pew Charitable Trusts recently unveiled new interactive maps. They show exactly where flood insurance premiums will decrease, increase, or remain the same — and by how much.

Risk Rating 2.0 incorporates more flood risk data to more accurately reflect a property’s individual flood risk. Types of data include:

  • Frequency and types of flooding (river overflow, storm surge, coastal erosion, heavy rainfall)
  • Distance to a water source
  • Property characteristics ( elevation, cost to rebuild).

Visual Tools Make Data More Accessible

ASFPM developed the interactive maps to help local leaders better communicate what’s occurring in their communities, but it’s also easy enough for an average person to grasp. 

“There is a fair amount of information available on Risk Rating 2.0. But getting that data out of spreadsheets is challenging. This new tool should help,” said Chad Berginnis, ASFPM’s executive director.

“Floods are this nation’s most frequent and costly natural disasters. And the trends are worsening. It’s important that people know their risk and buy flood insurance to help protect their homes and businesses. It’s equally important that communities take steps to minimize flood risk,” said Berginnis.

ASFPM used datasets from FEMA’s NFIP policyholder information to create the easy-to-use data visualization tool. The data are broken down across four categories. They range from a decrease in premiums to an increase of $20/month or more. A color-coded scale indicates the percentage of policyholders in each category.

Interactive Maps Show Premium Changes By State, Zip

The first interactive map at no.floods.org/rr2changes breaks down projected premium changes for each state and territory.

There are also two interactive maps by zip code:

The data compares a snapshot of policyholder premiums from May 31, 2020 with Risk Rating 2.0 premiums, applying statutory increase limits.

The comparison does not attempt to estimate premium increases that might have occurred without the new Risk Rating 2.0 pricing methodology.

This data won’t tell you what will happen to your premiums. But it will give you a rough idea of the percentages of people in your zip code who can expect increases within certain pricing brackets. The brackets include:

  • Decreases
  • Increases in the $0 to $10/month range
  • Increases in the $10 to $20/month range
  • Increases in the $20+/month range

Zip Codes in Lake Houston Area

The maps for local zip codes showed that the vast majority of all local policies in the Lake Houston area will increase between $0 and $10 per month.

The vast majority of policies in the upper Lake Houston area will see monthly increases of less than $10. This includes homes and businesses.

Clicking on the other tabs at the bottom of the map will show you the percentage of policies that fall into other ranges.

Very few people in these zip codes will see decreases. Almost everyone else will see increases greater than $10 or $20/month.

Looking only at increases for Single-Family-Home policies, about 90% of policies should see a monthly increase in the $0-10 range.

The maps contain far more detail than shown above. When you click on a zip code, areas surrounding the map and within the black pop-up box, display the data in tabular and graphic formats. Make sure you scroll through the data in the black pop-up box. It breaks the highest and lowest categories down into far more brackets. For instance, the $20+ category actually includes brackets up to $90-$100/per month.

Individual policyholders should contact their insurance agent for a personalized quote.

Use this data for comparison purposes to make sure you’re not overpaying. But remember, variations such as your proximity to water, first floor elevation, and the replacement value of your home could skew results from the average in your zip code.

The largest increases in the Houston area will be in Pasadena’s 77507 zip code. More that 50% of the policy holders there will see a $20+/month increase.

First Pricing Update in 40 Years

This is the program’s first pricing update in more than 40 years. 

“Under Risk Rating 2.0, FEMA is fixing longstanding inequities in the NFIP’s flood insurance pricing and establishing a system that is better equipped for the reality of frequent flooding caused by climate change,” said David Maurstad, senior executive of the National Flood Insurance Program. “Risk Rating 2.0 is not just a minor improvement, but a transformational leap forward that enables FEMA to set rates that are fairer and ensures rate increases and decreases are both equitable.”

According to FEMA, only 4% of policyholders nationwide are expected to see substantive increases. In a national rate analysis of current policyholders, FEMA has said:

  • 23% will see premium decreases
  • 66% will see, on average, premium increases of $0-$10/month (which is around what the average is now)
  • 7% will see, on average, premium increases of $10-$20/month
  • 4% will see, on average, premium increases of $20 or more per month. 


Background on Risk Rating 2.0 

Risk Rating 2.0 will deliver rates that are actuarially sound, equitable, easier to understand, and better reflect an individual property’s unique flood risk.

By communicating flood risk more clearly, the new methodology should help policyholders make more informed decisions on the purchase of adequate insurance and on mitigation actions to protect against flooding. FEMA is implementing the program in two phases:  

  • Phase I – New policies beginning Oct. 1, 2021 are subject to the new pricing methodology. Also beginning October 1, existing policyholders are able to take advantage of immediate decreases in their premiums when the policy renews. 
  • Phase II – Renewals of the remaining existing flood insurance policies will be written to the new plan starting April 1, 2022, allowing policyholders an additional six months to prepare for any adjustments.

Posted by Bob Rehak on 9/26/21 based on a press release from ASFPM provided by Diane Cooper

1489 Days since Hurricane Harvey


Progress Report on New Flood Maps and Flood-Insurance-Risk Ratings

On June 29, 2021, Harris County Flood Control District (HCFCD) gave Commissioners an update on the progress of new flood maps and flood-insurance-risk ratings. The flood-map changes could become effective as early as late 2023. FEMA’s new Risk Rating 2.0 system for flood-insurance pricing will be phased in during the next few years. See details below.

MAAPnext About Half Complete

MAAPnext is Harris County’s Modeling, Assessment and Awareness Project. The purpose: to develop the next generation of flood maps and tools. It will provide a better assessment of flood risks for individual properties, and make the nature of those risks easier for property owners to understand.

One of the significant changes: the new maps will capture different types of flooding, such as street flooding. This is currently the biggest missing piece of the flood-risk rating picture, according to the MAAPnext project team.

The new maps will also come with individual property reports that estimate flood depth, water-surface elevations, annual-chance of flooding grids, and 30-year chance of flooding grids. That last will estimate your chance of flooding at least once during a 30-year mortgage. The flood map grids will also be more detailed. They will provide estimates down to the 3 ft X 3 ft level.

FEMA and Harris County expect to have:

  • Draft flood-risk maps and associated data available for public review by the end of this year.
  • Preliminary Flood Insurance Rate Maps (FIRMs) for release by next summer.
  • Public meetings to review and explain the FIRMs to officials and residents during the second half of next year.

The earliest likely date that the new rate maps could become effective: late 2023.

Changes to flood-insurance premiums as a result of map changes could only happen after the new maps become effective.

Understanding FEMA’s Risk Rating 2.0

Risk Rating 2.0 is a massive FEMA effort to put the National Flood Insurance Program (NFIP) on a sound actuarial footing.

FEMA is updating the National Flood Insurance Program‘s (NFIP) risk rating methodology through the implementation of a new pricing methodology called Risk Rating 2.0. The methodology leverages industry best practices and cutting-edge technology to enable FEMA to deliver rates that are actuarily sound, equitable, easier to understand and better reflect a property’s flood risk.

More Risk Factors Considered

Elevations, flood-hazard zones, and rating tables will no longer be the only metrics used in calculating the flood-insurance premium for a property. For example, premiums will be distributed across all policyholders based on home values and a property’s unique flood risk. FEMA will also consider flood frequency, multiple flood types—river overflow, storm surge, coastal erosion and heavy rainfall—and distance to a water source along with property characteristics such as elevation and the cost to rebuild.

More Equitable Rates

Currently, many policyholders with lower-value homes are paying more than they should and policyholders with higher-value homes are paying less than they should.

That said, FEMA expects 87% of single-family homes to see a flood-insurance-premium increase of about $120 per year. Another 4% could see an increase of about $121 to $360 per year. Finally, 9% could see a decrease of up to $1,200 per year.

Source: FEMA Fact Sheet – County-Level Premium Change Analysis reproduced in HCFCD document

Phased Implementation

Beginning October 1 this year:

  • New policy holders will be subject to the new rates.
  • Current policy holders eligible for renewal can take advantage of premium decreases.

Starting in April 2022:

  • Existing policy holders who expect an increase with the new method could renew under Risk Rating 2.0, but will have an option to keep their current policies if cheaper for up to two years.
  • All remaining policies renewing on or after April 1, 2022, will be subject to the new rating methodology.  

Contact your flood insurance agent to clarify all timing, rate and discount questions.

How Does MAAPnext Factor into Risk Rating 2.0?

Harris County Flood Control District in partnership with FEMA lead the MAAPnext effort to revise flood insurance rate maps. FEMA alone leads the Risk Rating 2.0 effort to calculate new flood insurance rates. The maps will help calculate new premiums.

For more information, visit the MAAPnext website or the Risk Rating 2.0 section of FEMA’s.

Posted by Bob Rehak on July 4, 2021 based on information from HCFCD and FEMA

1405 Days since Hurricane Harvey

FEMA Reforming Flood Insurance Risk, Rate Structure

Since the National Flood Insurance Plan’s (NFIP) inception in 1968, additional legislation has been enacted to strengthen the program, ensure its fiscal soundness, create better maps, and tie rates closer to risk. Next year, FEMA will transform the NFIP with something called Risk Rating 2.0, a major change.

FEMA says that with Risk Rating 2.0, NFIP is leveraging industry best practices and current technology to deliver rates that are fairer, easier to understand, and better reflect a property’s unique flood risk.

That last part is code for “we lost a lot of money.”

Unsustainable NFIP Losses

NFIP continues to pay claims in excess of revenues, and borrows increasingly from the U.S. Treasury.

Last October, Michael D. Berman wrote an article titled “Flood Risk and Structural Adaptation of markets: An Outline for Action” in the Federal Reserve Board’s Community Development Innovation Review. In it, he says, “On September 22, 2017, after borrowing $5.825 billion to fund claims from Hurricanes Harvey, Irma and Maria, the NFIP had reached its maximum U.S. Treasury borrowing authority of $30.425 billion in program debt. On October 26, 2017, Congress cancelled $16 billion of NFIP debt—the first time in the history of the NFIP that has occurred. Then on November 9, 2017, the NFIP borrowed another $6.1 billion to fund additional 2017 losses, including additional losses from Hurricanes Harvey, Irma and Maria.”

Rating Flood Risk at Property Level

Berman claims, “The NFIP is clearly not properly pricing flood risk, nor is it adequately influencing prudent behavior by property owners and municipalities to sufficiently reduce or otherwise mitigate this risk…This new rating system, known as Risk Rating 2.0, is expected to include repricing of premiums based on flood risk at the property level.”

What Risk Rating 2.0 Involves

FEMA says its current risk-rating methodology has not fundamentally changed since the 1970s. It is now heavily dependent on the 1-percent-annual-chance-event (100-year floodplain).

Risk Rating 2.0 will incorporate a broader range of flood frequencies, new mapping data, and new technologies, more individual rating characteristics, such as: 

• Distance to the coast or another flooding source;
• Different types of flood risk; and
• The cost to rebuild a home.

By reflecting the cost to rebuild, the new rating plan will also aim to deliver fairer rates for owners of lower-value homes.

Rates that Promote Mitigation Efforts

FEMA also plans to offer mitigation credits to help incentivize risk-reduction efforts and reduce the cost of future flood events. Risk Rating 2.0 will initially provide credits for three mitigation actions:

  • Installing flood openings; 
  • Elevating onto posts, piles, and piers; and
  • Elevating machinery and equipment above the lowest floor.

FEMA is not yet saying how many premiums will increase or decrease, or by how much. Two things ARE clear though.

6:1 Payback on Flood Mitigation Investments

First, the old system is broken and unsustainable. Flood maps were outdated and based on data decades old in many cases. They contained many unmapped areas and the mapped areas were strongly influenced by local politicians and developers. Maps also did not reflect the effects of upstream development or more intense, frequent storms.

Second, the new system has a chance to incentivize risk-reduction. The old system encouraged people and communities to rebuild things the way they were after a disaster. We need a new system that encourages more prudent behavior.

FEMA cites a recent study by the National Institute of Building Sciences. Looking back over 23 years of data, the study found that for every dollar that the federal government invests in flood hazard mitigation, taxpayers save an average of six dollars of future disaster recovery spending.

Rebuild to Fail or Rebuild to Adapt?

The current federal flood insurance program promotes rebuilding in flood prone areas. Hopefully, the new system will promote adaptation to help mitigate increased risk.

Flood insurance rates that better reflect risk may promote more prudent behavior by developers, lending institutions, property owners, buyers, and real estate agents who will all “follow the money.”

For More Information

For more information, see:

Risk Rating 2.0 FAQs

Federal Reserve Board Community Development Innovation Review

Cheaper Flood Insurance: Five Ways to Lower the Cost of Your Flood Insurance Premium

NFIP Community Rating System: A Local Official’s Guide to Saving Lives, Preventing Property Damage, and Reducing the Cost of Flood Insurance

FEMA Discussion of Property Insurance Reform

FEMA Discussion about Reducing Risks and Rates

National Institute of Building Sciences 2019 Report on Mitigation

Posted by Bob Rehak on 4/2/2020

977 Days since Hurricane Harvey

A Simple Proposal to Fix NFIP, Reduce Elm Grove’s Flood Risk, Save Taxpayer Dollars, and Force Perry Homes to Follow Rules

This morning, I was talking to a friend, John Knoezer, about flooding in Elm Grove when he suddenly blurted out, “You know, the National Flood Insurance people should sue Perry Homes and turn that Woodridge Village into a giant detention pond.”

I knew John had a genius for heating and air conditioning. But I had no idea he also had a genius for politics, too. Boom. There it was. One simple idea to fix multiple problems. The NFIP budget deficit. Flood mitigation. Mushrooming tax bills. And rogue developers who ignore flood regulations at others’ peril. And all it requires is getting NFIP to act like any other insurance company.

Get NFIP to Behave Like a Normal Insurance Company

If the National Flood Insurance Program (NFIP) sued the people responsible for flooding Elm Grove, North Kingwood Forest and Porter, it could likely recover enough payouts to fix the lack of detention in Woodridge Village, Perry Homes’ troubled development in Montgomery County.

All we’re really talking about is getting NFIP to behave like a normal commercial insurance company. For instance, if someone rear-ends your car, your insurance company sues the person who did it (or their insurance company) to recover the amount of your claim. But not NFIP, according to everyone I’ve talked to.

Elm Grove after the May 7th storm, where block after block, homes were being gutted. Several feet of water from Perry Homes Woodridge Village development inundated homes that had never flooded before.

NFIP currently carries a $20 billion debt to taxpayers. Going after egregious companies that contribute to repeat flooding could reduce that amount.

It might also get those rogue companies to behave more cautiously and responsibly in the future. That could reduce future claims and NFIP’s overhead.

Imagine all the taxpayer dollars that could have been saved if Elm Grove, North Kingwood Forest and Porter had never flooded.

NFIP has already paid out twice this year to hundreds of flooded homeowners. And those homeowners could easily flood again and again. Because Perry Homes is doing NOTHING to reduce future flooding! Nothing incentivizes Perry Homes to reduce flooding.

NFIP has created no deterrent to flooding neighbors. So why would developers care if they do?

Another Benefit: Recovering Money in Court to Fix the Problem

If the repair costs downstream from Perry Home’s Woodridge Village total $100 million and just half the people had NFIP insurance, that’s $50 million that NFIP might recover from Perry Homes in court.

That money could easily buy the Woodridge Village land and construct a massive detention pond that would prevent future flooding.

Such lawsuits, if won, could also help reduce future taxpayer-subsidized flood-mitigation expenditures, most of which the federal government helps underwrite in some manner. But that’s just for starters.

Get Developers to Stop Pushing the Flood-Risk Envelope

Going after flagrant developers might help in another way, too. It might change the economics of pushing the flood-risk envelope. Right now, the economics favor those who push it hardest and furthest.

Developers have no disincentive to keep pushing these envelopes. NFIP bears all the flood risk; developers make all the profit.

Virtually all the incentives in this process foster behavior that worsens flooding.

We’re giving a competitive advantage to developers who worsen flooding. If NFIP were to sue a developer occasionally, it might change that.

Create Incentives to Follow Rules

In this case, had Perry Homes followed the rules and developed Woodridge the way it said it was going to, hundreds of homeowners would likely not have flooded.

Before Perry started developing the property, Elm Grove and North Kingwood Forest flood victims had weathered many storms as bad as May 7 and Imelda without flooding. So had people in Montgomery County on the western edge of the development where block after block of homes flooded that had never flooded before. See map of that area below and note the number of homes that flooded during the Harvey, Memorial Day, Tax Day and 1994 floods – ZERO!

According to residents, not one home flooded in this neighborhood west of Woodridge Village flooded before May 7, 2019. However, on May 7th, the vast majority of homes did flood…after Woodridge Village contractors altered the drainage going out of the subdivision. Flood data from Montgomery County. Flood Story Map hosted by ESRI.

So far, we’ve found numerous instances where Perry Homes did NOT follow Montgomery County or State of Texas regulations. People downstream paid the price.

More than 200 homes in Elm Grove and North Kingwood Forest flooded in May and more than 300 again in September.

For details, see installments to date in these “What Went Wrong” posts:

  • Part I – Overview
  • Part II – Lack of Erosion and Sediment Controls
  • Part III – The Detention Pond Catastrophe

If NFIP successfully sued the developer, the precedent might encourage all developers everywhere to follow the rules instead of bending them.

Save Tax Dollars

The precedent of NFIP suing a developer might also deter other developers in the future from pushing flood-prone projects or developing them in ways that contribute to flooding. So it could further reduce NFIP payouts and overhead. That could save even more dollars for this taxpayer subsidized program.

Bypass County Commissioners Who Refuse to Enforce Their Own Regulations

Another benefit of John’s brilliant suggestion: it eliminates a political battle with Montgomery County Judges and Commissioners – which may be unwindable for people in another county. Just get NFIP to make an example of a high-profile developer, such as Perry Homes. That might change some developers’ behavior who operate under the protective cover of local politicians. Those politicians compete for development dollars by not enforcing their own regulations. And that’s a huge part of the problem. Especially when a county line divides the perpetrators and victims as it does in this case.

Posted by Bob Rehak on 11/26/2019, with inspiration from John Knoezer

819 Days since Hurricane Harvey and 68 since Imelda

The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.

City and MoCo Offer NFIP Flood Claims Workshop with FEMA

Houston Council Member Dave Martin announced that the City of Houston and Montgomery County will host a flood claims workshop from 6:00 p.m. to 7:30 p.m. on Wednesday, June 19, 2019.

  • Kingwood Community Center
  • 4102 Rustic Woods
  • Kingwood, Texas 77345

This event is for anyone (resident or business owner) who has: a) suffered flood damages, b) has flood insurance through the National Flood Insurance Program (NFIP) and c) has questions about the policy claims process. FEMA representatives will be available to provide resources and answer questions. It does not matter what event caused the flood damage. Although the time has passed for submitting a Harvey claim, some people may still be struggling with the process. If they are protesting a settlement, they might benefit from this event.

Melissa Sturgis #4. Treasured antiques 3 generations back from New England are on this curb. Furniture and collectibles from 8 years overseas in Malaysia, London and Russia.
Melissa Sturgis’ home after Harvey
Flooded home in Elm Grove after May 7th rain.

For more information please contact the District E Office at DistrictE@houstontx.gov or Diane Cooper, Montgomery County Floodplain Administrator at Diane.Cooper@mctx.org.

Posted by Bob Rehak on 6/7/19

647 Days since Hurricane Harvey and One Month since May 7th

Benefits of Flood Insurance vs. Disaster Assistance

At the 2018_FloodWarn_Training_Kingwood on May 2, Diane Cooper of FEMA pointed out several startling statistics about the Hurricane Harvey Flood and flood insurance.

Home outside the 100-year flood plain during Hurricane Harvey.

According to the City of Houston, approximately 90,000 structures OUTSIDE of the 0.2% Risk Area (500-year flood plain) were impacted. Additionally, another 30,500 structures INSIDE the 1% risk area (100-year flood plain) and 29,000 in the 0.2% risk area flooded.

However, out of approximately 150,000 total homes flooded, only 26,511 insurance claims were filed. That’s because approximately only one in six Houstonians had flood insurance.

Most people felt that if they lived outside the 1% risk area, flood insurance was an expense they could do without. Yet four in every five flooded homes were outside the 1% risk area.

Let’s examine flood insurance vs. disaster assistance as hedge against such risk.

The following information came from the National Flood Insurance Program (NFIP) portion of the FEMA website.

Flood Insurance

Flood insurance has six primary benefits:

  • You are in control. Flood insurance claims are paid even if a disaster is not declared by the President.
  • More than 20 percent of NFIP claims from from outside of mapped Special Flood Hazard Areas.
  • There is no payback requirement.
  • Flood insurance policies are continuous, and are no non-renewable or canceled for repeat losses.
  • Flood insurance reimburses you for all covered building losses up to $250,000 for residential occupancies and upon to $500,000 for businesses. Contents coverage is also available up to $100,000 for residential occupancies and up to $500,000 for businesses.
  • The average cost of a flood insurance policy is about $600 annually. The cost of a preferred risk policy is less than $450 annually, if you live in a moderate-to-low-risk area.

Disaster Assistance

Compared to flood insurance, disaster assistance has several drawbacks.

  • Most forms of Federal disaster assistance require a Presidential declaration.
  • Federal disaster assistance declarations are not awarded in all flooding incidents.
  • The most typical form of disaster assistance is a loan that must be repaid with interest.
  • The duration of a small Business Administration (SBA) disaster home loan could extend to 30 years.
  • The average Individuals and Households Program award for Presidential disaster declarations related to flooding in 2008 was less than $4,000.
  • Repayment on a $50,000 SBA disaster home load is $240 a month or $2,880 annually at 4 percent interest.

The More You Know, the Better Flood Insurance Looks

Everyone should have flood insurance. Remember, not all flooding comes from rivers and streams. During Harvey, thousands of homes flooded from overflowing streets when storm drains and sewers backed up. Floods can happen anytime, anywhere…even in deserts.

Homeowners insurance policies typically don’t cover flood damage. Disaster assistance payouts will not come close to covering all the damage that people typically suffer from a flood. And the most common type of disaster assistance is a loan that must be repaid with interest.

You can buy flood insurance through the NFIP regardless of your flood risk; it’s easy to get through any licensed broker. You can even use your credit card. Consider it seriously as we enter another hurricane season and a tropical wave is expected to slime us this weekend.

Posted by Bob Rehak on June 12, 2018

287 Days since Hurricane Harvey