Flood Insurance Rates Just Rise For Millions Of Homeowners | Personal finance


What current policyholders should do

If you are currently purchasing flood insurance, you can relax, at least for a while, as the impact of the 2.0 risk rating will not be fully felt until April 1, 2022. Renewals after that date will apply. will do under the new rating criteria, but with a caveat that helps those whose rates go up. Under the program, your premium cannot increase by more than 18% per year. This means that if your new ‘2.0’ premium is more than this percentage increase, you will be protected from the rest until at least next year.

So if, for example, your rate were to increase by 25%, you would pay 18% on your first renewal, then the remaining 7% on your second renewal, plus any further increases due to other factors this year- the. . Not only that, but your hikes are also limited to this percentage in perpetuity, regardless of the cause of the increase.

While the likelihood of your rate going up is very local, down to your specific property, FEMA has created statewide summaries of how many properties will see rates go up and down, and by how much.

What New Flood Insurance Buyers Should Do

Potential new flood insurance customers don’t need – shouldn’t – let NFIP changes prevent them from considering a policy. Coverage can offer attractive and cost-effective protection, even if you are not located in a flood zone.

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