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 Risk Rating 2.0: Equity in Action all existing policies will move toward their full risk rates based on statutory glidepaths. Some rates will go up, some will go down, and some will stay about the same. Properties with low risk will continue to pay lower rates.

Beginning October 1, 2021, existing policyholders who will see premium decreases will be able to take advantage of those decreases at the first policy renewal after implementation of the new rating methodology.

Under Risk Rating 2.0: Equity in Action, risk will be identified more robustly 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.