TUCSON (KVOA) – New federal flood insurance rates take effect this Friday. The Federal Emergency Management Agency said the new flood insurance rates would better reflect the real risk of flooding. Until now, flood insurance premiums have been based on whether or not a house is in the 100-year floodplain, land that is expected to be flooded during a major storm.
But not anymore.
âFlood insurance will no longer be funded by everyone, the more risk you run the more you will pay,â said Nick VinZant, senior analyst at QuoteWizard. FEMA believes the new approach will be fairer. âRisk Rating 2.0 is FEMA’s attempt to make flood insurance rates fairer so that people with flood insurance policies pay a fair rate for their flood insurance,â said Brian Jones, division director of floodplain management in the Pima County Regional District flood control.
FEMA’s new pricing methodology is called Risk Rating 2.0. It incorporates new data to better reflect your individual flood risk. âThis is the loss history, so if this property has already been flooded and losses are going to change the rate,â Jones said, âThis is your distance to the source of the flood, so how far you are from the river or stream that is the source of your flooding. “
In Arizona, 75% of homeowners will see their premiums increase, but not too much. In most cases, around $ 10 per month. According to VinZant, 62% of Pima County policyholders will see their flood insurance increase, 6% of people will see a huge decrease, $ 100 or more every month.
Residents of Pima County are getting a reduction on flood insurance premiums due to flood mitigation efforts by the Pima County Regional Flood Control District. The National Flood Insurance Program (NFIP) has a community rating system, which encourages the community to exceed national flood mitigation minimums. Measures such as raising houses and building shoreline protections along rivers and lakes can reduce premiums. âSo in unincorporated Pima County, we are currently a Class 5 community that places us in the top 15% of the country in terms of ratings and gives everyone in Unincorporated Pima County. company a 25% reduction on their flood insurance policy, âJones said. This represents an annual savings of $ 400,000 on all policies. This will increase to $ 1 million in savings on April 1, 2022, when the unincorporated community transfers to a Class 3 community. Only 15 communities across the country are rated in Class 3.
Climate change and money are the main drivers of the overhaul of flood insurance pricing. âThe problem is that these historic floods happen so often that the program is interrupted and it cannot afford to continue moving forward,â VinZant said.
The new system comes into effect this Friday for new policies, April 1 for existing policyholders.