After using essentially the same rating method to develop premiums for National Flood Insurance Program (NFIP) policies for the past 50 years, the NFIP is introducing a new rating method for policies with effective dates of October 1, 2021 and after. The planned release of the new rating method, which is being referred to as ‘Risk Rating 2.0’, remains subject to potential Congressional actions. If the planned release is revised by either the NFIP or Congress, we will provide appropriate updates.

The new rating method will apply to all new flood policies issued with effective dates of October 1, 2021 and after. Policies renewing on or after October 1, 2021 will have the option of being rated under either the new rating method or the current rating method depending on which option is most beneficial.  

All policies renewing on or after April 1, 2022 must be converted to the new rating method.

Efforts will be made to help you develop the information required to compare the two rating methods on current polices when insufficient information is currently available to rate the policy under the new method. We will provide further communications on this.

• NFIP premiums will no longer be based on an assigned flood zone.  Instead, premiums will be based on; 
• the geocoded location of the insured building, 
• several location specific flood risk assessment factors, 
• construction features of the building and
• how the building’s replacement cost relates to the limits of insurance purchased. 
• Elevation Certificates will no longer be required for NFIP flood policies. They may still be provided, however, in order to amend the first floor height measurement used to rate the policy. All policies currently rated using the information provided by an Elevation Certificate, will automatically be rated with it when they convert to the new rating method.
• The Preferred Risk Policy (PRP) option will cease to exist. As existing PRP policies transition to the new rating method, policyholders will be able to select the coverage limits and deductible options they desire. They will no longer be restricted to the pre-set PRP coverage limit options and deductibles.
• Pre-FIRM rating and Newly Mapped rating will no longer be alternate rating approaches. Both will become discounts to qualifying and benefitting risks.