When High-Risk Becomes Higher, Offer Cost-Savings

What’s changing

A client’s flood risk is changing from a high-risk area (Zone A) to higher-risk area (Zone V) or the Base Flood Elevation (BFE) is increasing.

An image depicting a transition from high risk to higher risk

What this means for existing clients

Under Risk Rating 2.0: Equity in Action, all existing policies will move toward their full risk rates based on statutory glidepaths. The increase and target premiums for grandfathered policies are similar to those for non-grandfathered policies – some will see decreases, some will see smaller increases, and some will see larger increases in similar proportion to non-grandfathered policyholders. 

Policies formerly eligible for grandfathering will transition to their new full risk premium under Risk Rating 2.0: Equity in Action. Increases for existing policies will be gradual and within the 18% annual cap imposed by Congress. Decreases will apply upon first renewal on or after October 1, 2021. New policyholders, or those who renew after October 1, 2021, will not be able to participate in grandfathering. All policies will be subject to Risk Rating 2.0: Equity in Action beginning April 1, 2022.