Page 71 - Region 5 NAR Update
P. 71
Risk Rating 2.0
• FEMAisalsomovingforwardwithanumberofadministrative reforms to streamline and improve the NFIP.
• It’sexpectedtorolloutanewratingandinsurancepricing system in 2021 under its Risk Rating 2.0 initiative.
• FEMA’scurrentratesoverchargemuchoftheU.S.because the methodology hasn’t been updated in 50 years.
• Byadoptingmoreaccurateandmoderntechnologiesusedby insurance companies and proven in states such as Florida, FEMA will be able to align NFIP rates to the specific flood risk of each individual property owner.
• Thecurrentriskratingsystemisbasedonanationalaverage, which doesn’t reflect actual risk. Many people in high-risk areas pay less in premiums than people in lower risk areas.
• NARprovidedresearchtosupportbetteraligningratestorisk, and NAR’s insurance committee has been meeting regularly with FEMA to discuss the new initiative.
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