Flood Insurance Rates Increase

On Oct. 1, FEMA announced key changes for the National Flood Insurance Program (NFIP), to begin on April 1, 2020.  These changes include updated increases to conform to the premium rate caps established by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA).   

Beginning on April 1, 2020, renewal premiums will increase an average of 11.3 percent. These amounts do not include the HFIAA Surcharge, or the Federal Policy Fee (FPF). Nearly 80 percent of policyholders already pay a full-risk rate and will therefore not experience this rate increase.  The Severe Repetitive Loss Premium is increasing to 10 percent for all policies covering properties with that designation.

In addition, it was also announced that annual premium increases of 14.9 percent for preferred risk policies and 14.8 percent for newly mapped procedure policies will be effective on Jan. 1, 2021.

The guidance and premium rates in this edition do not represent any changes as a result of FEMA’s planned Risk Rating 2.0 initiative. FEMA continues its preliminary analyses and internal review on how premium rates may change. Once completed, FEMA will provide additional guidance and updates in the future.

In addition to the rate increases, revisions to the NFIP Flood Insurance Manual, which is updated twice a year, took effect Oct. 1, 2019. FEMA incorporated the NFIP program changes published in April 2019 into this edition.

The updated edition of the “Flood Insurance Manual” does not change flood insurance coverage or supersede the terms and conditions of the standard flood insurance policy. The changes in effect include:

  • An updated list of Community Rating System eligible communities (Table 3).
  • An updated list of resources and contact information for technical assistance.
  • Several updates or changes to various Letters of Map Revision.

The two bulletins announcing these October changes are available online. Visit FEMA.gov to review the NFIP Flood Insurance Manual.