The Federal Emergency Management Agency (FEMA) announced today it was deferring implementation of its new flood insurance risk rating program by one year until Oct. 1, 2021.
As NAHBNow has previously reported, FEMA, which oversees and implements the National Flood Insurance Program (NFIP), has initiated a long-term effort to transform the program to make it more consumer friendly and better reflect the actual risks properties face.
FEMA said today that it is deferring the implementation of the initiative, commonly referred to as Risk Rating 2.0. The agency had previously announced that new rates for all single-family homes would go into effect nationwide on Oct. 1, 2020.
According to the FEMA notice, additional time is required to “conduct a comprehensive analysis of the proposed rating structure so as to protect policyholders and minimize any unintentional negative effects of the transition.”
As a result, FEMA decided to defer the implementation of Risk Rating 2.0 until Oct. 1, 2021.
It is worth noting that this extension will now allow for all NFIP policies – including, single-family homes, multi-unit and commercial properties — to change over to the new rating system at one time. The originally proposed phased approach would have only resulted in new rates for all single-family homes to go into effect nationwide on Oct. 1, 2020.
NAHB will continue working with FEMA staff to develop industry-specific briefings and resources throughout the process. Please continue to look to NAHBNow for further updates as they occur.
For more information — including FAQs developed by FEMA visit NFIP Transformation.