The Federal Emergency Management Agency (FEMA) in the U.S. has delayed the implementation of previously announced changes to the National Flood Insurance Program (NFIP) by one year, to October 1st, 2021.
In March 2019, an initiative called Risk Rating 2.0 was announced by FEMA. Designed to link NFIP premiums to the actual flood risk of individual homes, instead of the current system which sets prices based on whether a home sits within the 100-year flood plain, Risk Rating 2.0 was scheduled to launch on October 1st, 2020.
FEMA has today announced that in spite of its initial plan to implement new rates for all single-family homes nationwide next year, additional time is now required in order to undertake a comprehensive analysis of the proposed rating structure to ensure policyholders are protected and to mitigate any unintentional negative effects of the change.
“Therefore, FEMA decided to defer the implementation of Risk Rating 2.0 by one year to October 1, 2021,” says FEMA.
The organisation adds that this extension also enables all NFIP policies to changeover to the new rating system at one time as opposed to a phased approach.
Through the next 12 months, FEMA says that it will continue to actively engage with Congress and other stakeholders to ensure transparency and visibility as it looks to transform and improve the NFIP.
