Flood Insurance Bill Aims to Provide More Transparency About Premium Rates
Sens. Bill Cassidy (R-La.) and Kirsten Gillibrand (D-N.Y.) today introduced the Flood Insurance Pricing Transparency Act, NAHB-supported legislation that requires the Federal Emergency Management Agency (FEMA) to publish the formulas used to calculate mitigation credits for policyholders under Risk Rating 2.0.
The bill also requires FEMA to release a toolkit that could be used to estimate the cost of insurance for new construction without compromising proprietary information. Sen. John Kennedy (R-La.) is a co-sponsor of the legislation.
FEMA is continuing its plans to allow Risk Rating 2.0 to go into full effect on April 1, 2022. The new flood insurance risk rating methodology will determine how the agency will apply the new rating factors and credit options when determining insurance premiums for policies issued under the National Flood Insurance Program (NFIP).
NAHB is concerned that FEMA will apply this new risk rating without sufficient transparency to allow policyholders to understand how their premiums will be affected and what steps they can take to mitigate flood risks and lower their premiums.
“With FEMA set to institute new National Flood Insurance Program premium rates on April 1 under its Risk Rating 2.0 program, NAHB commends Sens. Bill Cassidy and Kirsten Gillibrand for introducing bipartisan legislation to provide transparency to this process,” said NAHB Chairman Jerry Konter. “By allowing home owners to determine how FEMA sets premium rates for insured properties based on their location, elevation and other factors, this bill will enable consumers to estimate in advance any changes in their premium rates. It also provides property owners the ability to assess if and how much their insurance rates might decline if they take actions to reduce their homes ’risk of flooding.”
The National Flood Insurance Program (NFIP) provides flood insurance for over five million policyholders.
Learn more about NAHB’s advocacy efforts on nahb.org.