Blog: APCIA raises awareness of FEMA’s Risk Rating 2.0 for consumers – Financial Regulation News – Financial Regulation News

The American Property Casualty Insurance Association (APCIA) said it wants to raise awareness about the Federal Emergency Management Association’s (FEMA) recently implemented Risk Rating 2.0 (RR 2.0) that more accurately matches flood insurance pricing to consumers’ actual risk.

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The new system went into effect with National Flood Insurance Program (NFIP) renewals on April 2. Designed to address the solvency of the NFIP and bring greater fairness to flood insurance premiums, RR 2.0 may impact policyholders and communities, the APCIA said.

“APCIA has long supported FEMA’s plans to shift the NFIP to a more accurate rating system. It is important that consumers understand their true flood risk,” the organization said. “Through RR 2.0, many NFIP policyholders should expect to see a change in their flood insurance premium. Many policyholders in lower-risk communities could see premium decreases; while many higher-risk customers, those in coastal or flood-prone communities, could see higher rates.”

The organization said flood insurance consumers should review their policies and note any changes on their renewal statements, as well as contact their agents or insurance providers with any questions.

“While accurate rate setting is important, we cannot overlook the mission of affordability for those who need assistance,” the group said. “Many policyholders, including families and businesses in economically distressed and minority communities, are already designated to experience significant risk from climate change and flooding and now they could find a significant increase in their premium as a result of RR 2.0.”

The organization also urged Congress to address the issue of long-term stability for the NFIP, as well as address affordability through targeted assistance.

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