Risk Score 2.0, FEMA’s new flood risk assessment methodology, is widely viewed as fairer and will result in rate changes for most customers.
DES MOINES, Iowa – The people of Iowa are no strangers to flooding and the costly damage that flooding can leave behind.
“They may not live along the Missouri River or along the Mississippi River, but they can be in an area prone to flooding and inclement weather,” said Doug Ommen, Iowa’s insurance commissioner.
When it comes to financial protection against flood damage, there is little that consumers should know.
First, home insurance probably doesn’t protect you against the type of flood damage that results from a natural disaster.
“The particular localized downpour can actually create flooding circumstances that are not covered by some of the traditional homeowners’ covers,” Ommen said.
To be covered, homeowners need a separate flood insurance policy. For the most part, this is only available through the National Flood Insurance Program. Right now, only about 2% of people in Iowa actually have this coverage.
For years, the amount consumers pay largely depended on the area in which their property was located.
“Looking at this, it’s not really a very fair or precise way to assess. It penalizes some people, [They’re] paying too much for insurance, ”said Mark Friedlander, spokesperson for the Insurance Information Institute.
Now that scoring system is changing. Beginning in October, rates for new policies will be based, in part, on the risk and value of an individual property.
“Risk Rating 2.0 really follows industry best practices and the latest technology, as well as flood risk modeling,” Friedlander said.
The same methodology will be used for renewals from April 2022.
“This is important because a lot of people are thinking, ‘I’m going to be hit by a rate change right away, and I’m going to see an increase in my next bill next month. “Well, that’s not how it works,” Friedlander said.
According to FEMA, this will result in rate changes. In Iowa, most consumers will end up paying more. Here are FEMA’s estimates:
- 37% will see a decrease
- 51.7% will see an increase of less than $ 10 per month
- 11.3% will see an increase of more than $ 10 per month
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