New "Risk Rating 2.0"

Major Changes to Flood Policy Rates

FEMA's method for determining flood insurance rates has undergone a major overall effective October 1, 2021. Newly written policies will be impacted the most, when an active policy from the National Flood Insurance Program (NFIP) wasn't in place prior to this date. 

Until April 2022, existing policy "renewals" will have the option of being rated via either the old legacy rating system or the new "Risk 2.0" rating, and choose the best option.  However, after April 21, 2022 - absent federal intervention - all policies will transition to the new rating system. It will be imperative, people with existing flood insurance policies don't let them lapse or the rates will escalate dramatically if a policy needs to be reissued. 

The greatest impact will affect "new" policies; typically for new construction and buildings that have been in a flood zone but didn't have a policy. For existing policies there's still an 18% cap on annual rate increases. Yet reaching the level where those annual increases would stop will now be much higher for most policy holders. Uninsured buildings remapped by FEMA from "X" type flood zones into other type zones will have a more subtle annual glide-path than typical new policies.

Information on this new rating system is very fluid, with near daily updates. Rates are now very specific to each building and its location. For the latest information and particulars about your building, please consult your Insurance Agent.

Flood Maps No Longer Used For Policy Rates

Under this new system, the Flood Insurance Rate Maps won't be used to determine policy rates. The flood maps will still be used to:

  • By communities to ensure construction compliance standards.
  • By lenders to know if mandatory flood insurance coverage rules apply.

Flood Policies Now Rated on Multiple Factors:


  • Geographic Variables (Building's Location)
    • Most of these factors aren't being disclosed by FEMA. According to FEMA, some of these references are third-party proprietary databases not subject to disclosure.
    • There are concerns for the accuracy of this data, especially building heights; shown above as "Elevation Relative to Flooding sources." Research by the local non-profit Fair Insurance Rates in Monroe (FIRM) shows this data to have an accuracy rate of not more than 18%.
      • It's strongly recommended Owner obtain and submit an Elevation Certificate for each building to be rated under FEMA's new Risk Rating 2.0. 
    • Notes
      • Territory (MSA) = Metropolitan Statistical Areas (MSA) are delineated by the U.S. Office of Management and Budget (OMB) as having at least one urbanized area with a minimum population of 50,000. 
      • HUC-12 = Hydrologic Unit Codes from the U.S. Geological Survey
  • Building variables (Building Physical Characteristics) 
    • Type of construction (masonry, wood-frame etc.)
    • First Floor Height (Height of the first floor above the Lowest adjacent grade alongside the building).
      • This isn't a measurement on an Elevation Certificate, but can usually be determined by taking the height of the First Finished Floor - minus - Lowest Adjacent Grade. 
    • Notes:
      • RCV = Replacement Cost Value
  • Other Variables
    • Prior NFIP Claims
      • Once a damage claim is approved under RR 2.0, the rates look backwards two decades for prior claims and adjust the annual rate accordingly. 
    • Notes
      • Pre-FIRM Status = In Key West, these are buildings constructed on or before December 31, 1974 that predated the first flood maps. 

Fair Insurance Rates in Monroe (FIRM) analyzed FEMA's projected rate increases for Monroe County. The results area shown in the bar graph to the right.

FIRM's Bar Graph Comparison of new Flood Policy Rates for Monroe County

FIRM's three-way local rate comparisons →

  • Legacy rating
  • RR 2.0 without an Elevation Certificate
  • RR 2.0 with an Elevation Certificate

FIRM's Risk Rating 2.0 Local 3-Way Rate Comparisons Chart

Percent and amount difference →

FIRM's Risk Rating 2.0 Local Percent & Cost Rate Comparisons Chart

It pays to have an Elevation Certificate →

Pie chart showing 82% flood policies get lower rates submitting elevation certificates

Recommend joining the local non-profit Fair Insurance Rates in Monroe (FIRM) to receive their newsletter updates.


Real-time dashboard of new rate comparisons: