Converting to Lower-Cost Preferred Risk Policies

What’s changing

A client’s property’s flood risk is changing from a high-risk area (Zone A or V) to a moderate- to low-risk area (Zone B, C, or X).

An image depicting a transition from high to moderate/low risk

What this means for existing clients

Under NFIP's pricing approach, Risk Rating 2.0, all existing policies move toward their full risk rates based on statutory glidepaths. Some rates have gone up, some have gone down, and some have stayed about the same. Properties with low risk will continue to pay lower rates.

Existing policyholders who will see premium decreases will be able to take advantage of those decreases at the first policy renewal.

Under NFIP's pricing approach, risk is identified by leveraging FEMA mapping data and FEMA-produced models and tools in combination with industry standard commercial catastrophe models to develop rating variables. These rating variables provide the data necessary to accurately assess the risk at a structure level and therefore accurately price insurance. These variables include flood types, distance from a flooding source, frequency of flood, elevation, and the cost to rebuild a property.