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FEMA overhauls National Flood Insurance Program

FEMA helped out during historic flooding from Hurricane #Sally. - Karen Graham
FEMA helped out during historic flooding from Hurricane #Sally. - Karen Graham

In a statement on Risk Rating 2.0, the new update to the National Flood Insurance Program’s pricing methodology, Secretary of Homeland Security Alejandro N. Mayorkas said, “We are putting equity at the forefront of our work at DHS and making reforms to help our nation confront the pressing challenges caused by climate change.

This is the first time in over five decades that the federal government has made any major changes to the federal flood insurance program that provides about $1.3 trillion in coverage for about five million homes in 22,500 communities across the nation.

One of the big changes in the methodology will be fixing the current system’s unintentional inequities in which many policyholders with lower-value homes are paying more than they should and policyholders with higher-value homes are paying less than they should.

As a result, nearly a quarter of the NFIP’s current policyholders will see a decrease in their premiums under the new pricing structure, according to the statement.

Texas has been dealing with flooding from heavy rains caused by Tropical Depression Imelda.

Texas has been dealing with flooding from heavy rains caused by Tropical Depression Imelda.
USGS Texas


To create Risk Rating 2.0, FEMA consulted with the U.S. Army Corps of Engineers, U.S. Geological Survey, and the National Oceanic and Atmospheric Administration, along with experts and actuaries from across the insurance industry, to develop and integrate the data and models used for the methodology.

The Hill is reporting that under the new methodology, 23 percent of policyholders will see their premiums decrease. Sixty-six percent (or two-thirds) will see increases of up to $10 per month. Around 7 percent will see increases of between $10-$20 a month and nearly 4 percent will see higher increases.

The changes will go into effect for new policies on Oct. 1 and for renewals on April 1, 2022. FEMA said that policyholders who are slated to see decreases and are up for renewal can also take advantage of that starting Oct 1.

Readers can download the FEMA fact sheet that goes into detail on everything you want to know about Risk Rating 2.0.

Written By

Karen Graham is Digital Journal's Editor-at-Large for environmental news. Karen's view of what is happening in our world is colored by her love of history and how the past influences events taking place today. Her belief in man's part in the care of the planet and our environment has led her to focus on the need for action in dealing with climate change. It was said by Geoffrey C. Ward, "Journalism is merely history's first draft." Everyone who writes about what is happening today is indeed, writing a small part of our history.

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