How the Latest FEMA Update will Affect Flood Insurance Policies Next Year

Did you know that flood insurance rates are set to increase as early as next year? By April 1, 2022, every flood insurance policy in Florida will be priced as per a new rating policy. This policy will significantly increase the flood insurance premium from what it is today. Federal Emergency Management Agency (FEMA), the body responsible for the move, has termed the move as Risk Rating 2.0 that is intended to make the rates more “equitable”.

So, if you haven’t renewed Florida flood insurance in Miami, you could be looking at a steep price hike anytime soon.

What Prompted FEMA to Embrace Risk Rating 2.0?

As a responsible federal institution, FEMA believes that flood insurance is what saves everyone from incurring steep damages in an event of a flood. It is this policy that helps them recover their financial losses quickly. However, the guidelines that define how flood insurance covers everyone are mostly based on the measurements that were taken way back in the 1970s.

Since then, the frequency of floods has shot up. The reasons behind flooding have also become more diverse, all of which are putting a financial strain on the federal institutions.

Not only that, the insurance premium is more or less the same for people regardless of whether they have a low-value home or a high-value property.

The new update seeks to address all such concerns and bring forward a policy that sets insurance premiums based upon all these factors.

Having said that, the insurance premium rise will hit just about everyone. Those with low-value properties may witness a smaller premium increase than those living in high-value residences.

Flood Risk is on the Rise

To a great extent, FEMA is not wrong. The flood risk is indeed much bigger than what it was back in the 1970s, and still bigger than what it was just a few years back. As many as 20% of insurance claims last year were shared by people who have been living in designated low flood-risk areas. They never had seen floods before but were hit hard by what they saw.

Those who had insurance were able to encash it. Those who didn’t were left with no option but to incur steep damages.

Do not wait for that to happen to you. Also, know that flood insurance is not remotely a part of the homeowner’s insurance policy that everyone in the state already has. Flood insurance is a different entity and seems to stay there for a long while.

How to Buy Florida Flood Insurance

Look around for the available flood insurance options near you.

If you wish for a federal flood insurance plan, you can go for National Flood Insurance Program (NFIP), which is governed by FEMA. By buying that plan, you will be covered by a federal plan with assured coverage. However, your coverage will have a fixed cap. Anything above that will be borne by you only.

The other option for you will be to go with private flood insurance in Miami, FL. There are many companies that offer customized flood insurance plans in the city. While most of these plans are based on the NFIP template, these plans are customizable to suit your preferences and need.

So, for a similar policy, you will get more or less the same coverage in private flood insurance, just like NFIP. However, unlike the latter, private flood insurance will let you make changes to the covered items, updating the insurance premium you pay accordingly.

With private flood insurance, you will be able to get a much higher coverage, with more user-friendly features and a quicker redeemable time limit.

Speak to your nearest Florida flood insurance company based in Miami to get a free quote today.