As an Insurance professional, this is music to my ears.
As a Floridian however, I can’t help but fear many less affluent folks will choose to go without Flood Insurance and further exacerbate the Coverage Gap. I strongly believe an income or Net Wealth requirement could have been put in place to keep subsidies for these less affluent Flood Insureds but removing them for the rich & their vacation homes.
FEMA needed to improve their rating method. The prior rating model was outdated and probably too simplified. However they have missed the mark on new purchases where the prior owner did not carry flood coverage. In these cases the rates are much too high and will not accomplish their goal of encouraging all homeowners to carry coverage. Additionally, it would probably be wise for banks to require all mortgage holders to secure flood insurance, regardless of zone. While FEMA may have improved their rating technology (and the jury is still out on this), they haven’t proved that they can properly identify high & low risk zones.
Agreed- a 21st century transformation was sorely needed. Personally, I’m very hopeful they did get the rating tech & mapping right with 2.0. The preliminary studies have been promising, but you’re right in that the studies may not necessarily be accurate & we will only know for sure a year or two after 2.0 is more widely put into practice.
Here’s another thing to consider: the majority of FEMA claims are paid out to REPEAT Claimants. There’s at least 1 case in Hoboken, NJ for example where FEMA paid 17 times for a coastal property owner to rebuild their home from routine flooding. One quick solution to greatly assist in FEMA’s debt-load: put an end to madness like this. If you’ve rebuilt a property X amount of times, make them ineligible for coverage. (I’m sure I’m overlooking some Reg preventing FEMA from doing so, but even then, this is still dumb, and the Reg probably needs revising to no longer permit silliness like this)
Analyst, Agree that we must subsidize less affluent. There are many and they live along Florida’s coasts and rivers like everyone else. If we price all the lower income people out, who will work in our coastal restaurants , tourist traps, and hotels generating all that tax income?
Hopefully this will help buyers and sellers struggling in my area. We are an inland community and for decades have been hit with the same rates as people in high risk areas near rivers or low lying areas. I’ve given clients quotes for NFIP policies, never heard back from them, talked to their realtor and found out the deal fell apart because of flood insurance being too expensive. Our only real flood risk in the area is runoff. Cities in the area have done a ton of flood control improvement and management. It’s unfair for property owners in the are to pay more to subsidize those near bodies of water and areas of repetitive flooding.
I have tried the new rating system on all of my renewals since November 2021. The insureds stayed with the old rating system because the premium was 3 to 5 times more. Note: None of these has ever had a flood claim and that goes back almost 25 years for one of these insureds. Most of my customers with flood insurance live with a creek that goes through our community. The city had major flood control work done to this creek about 20 years ago which the new rating system seems to ignore. I am already looking at flood programs other than the NFIP. However, does an agent get the NFIP to take a second look if the new rates seem illogical?
I’m an insurance agent in South Florida that at one point sold exclusively flood insurance.
FEMA/NFIP has been using elevation certificates and surveys done for large portions of land. Private Flood has been a booming thing for 3 or 4 years now and their technology has been getting better every day. FEMA hopped on the Lidar wave that companies like Neptune have been doing. Now they can get the actual elevations on a per parcel basis without an elevation certificate. And the Lidar is more accurate now than it was a couple years back. Picture a town from a satellite view and then put a grid on it, as years go back the grid lines get closer and the elevation points get more accurate.
Before if you had a portion of a neighborhood at the bottom of a hill and another at the top and neither had an elevation certificate, they’re going to be rated pretty similarly. So the bad areas are going to get a lot worse. I hope this gives a more clear understanding of risk rating 2.0
As an Insurance professional, this is music to my ears.
As a Floridian however, I can’t help but fear many less affluent folks will choose to go without Flood Insurance and further exacerbate the Coverage Gap. I strongly believe an income or Net Wealth requirement could have been put in place to keep subsidies for these less affluent Flood Insureds but removing them for the rich & their vacation homes.
FEMA needed to improve their rating method. The prior rating model was outdated and probably too simplified. However they have missed the mark on new purchases where the prior owner did not carry flood coverage. In these cases the rates are much too high and will not accomplish their goal of encouraging all homeowners to carry coverage. Additionally, it would probably be wise for banks to require all mortgage holders to secure flood insurance, regardless of zone. While FEMA may have improved their rating technology (and the jury is still out on this), they haven’t proved that they can properly identify high & low risk zones.
Agreed- a 21st century transformation was sorely needed. Personally, I’m very hopeful they did get the rating tech & mapping right with 2.0. The preliminary studies have been promising, but you’re right in that the studies may not necessarily be accurate & we will only know for sure a year or two after 2.0 is more widely put into practice.
Here’s another thing to consider: the majority of FEMA claims are paid out to REPEAT Claimants. There’s at least 1 case in Hoboken, NJ for example where FEMA paid 17 times for a coastal property owner to rebuild their home from routine flooding. One quick solution to greatly assist in FEMA’s debt-load: put an end to madness like this. If you’ve rebuilt a property X amount of times, make them ineligible for coverage. (I’m sure I’m overlooking some Reg preventing FEMA from doing so, but even then, this is still dumb, and the Reg probably needs revising to no longer permit silliness like this)
Analyst, Agree that we must subsidize less affluent. There are many and they live along Florida’s coasts and rivers like everyone else. If we price all the lower income people out, who will work in our coastal restaurants , tourist traps, and hotels generating all that tax income?
Hopefully this will help buyers and sellers struggling in my area. We are an inland community and for decades have been hit with the same rates as people in high risk areas near rivers or low lying areas. I’ve given clients quotes for NFIP policies, never heard back from them, talked to their realtor and found out the deal fell apart because of flood insurance being too expensive. Our only real flood risk in the area is runoff. Cities in the area have done a ton of flood control improvement and management. It’s unfair for property owners in the are to pay more to subsidize those near bodies of water and areas of repetitive flooding.
I have tried the new rating system on all of my renewals since November 2021. The insureds stayed with the old rating system because the premium was 3 to 5 times more. Note: None of these has ever had a flood claim and that goes back almost 25 years for one of these insureds. Most of my customers with flood insurance live with a creek that goes through our community. The city had major flood control work done to this creek about 20 years ago which the new rating system seems to ignore. I am already looking at flood programs other than the NFIP. However, does an agent get the NFIP to take a second look if the new rates seem illogical?
Note: the premium on the new program is 3 to 5 times more than the old rating system with no explanation why and no way to appeal to underwriting.
I’m an insurance agent in South Florida that at one point sold exclusively flood insurance.
FEMA/NFIP has been using elevation certificates and surveys done for large portions of land. Private Flood has been a booming thing for 3 or 4 years now and their technology has been getting better every day. FEMA hopped on the Lidar wave that companies like Neptune have been doing. Now they can get the actual elevations on a per parcel basis without an elevation certificate. And the Lidar is more accurate now than it was a couple years back. Picture a town from a satellite view and then put a grid on it, as years go back the grid lines get closer and the elevation points get more accurate.
Before if you had a portion of a neighborhood at the bottom of a hill and another at the top and neither had an elevation certificate, they’re going to be rated pretty similarly. So the bad areas are going to get a lot worse. I hope this gives a more clear understanding of risk rating 2.0