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Flood Insurance Changes 2021-2022

Flood insurance costs are changing? Why? FEMA’s flood insurance plans and pricing are a bit outdated. Some areas have not been reviewed for many years; some places have probably not been reviewed since FEMA was set up in 1979. This has resulted in flood insurance being way overpriced for some homeowners as well as underpriced for other homeowners.

In this article, we will take a look at what is impacting flood insurance and resulting in the changes to flood insurance plans. We will also look at how those impacts will increase or decrease your flood insurance. Finally, we will look at FEMA’s new flood insurance plan called Risk Rating 2.0.

Why Is Flood Insurance Changing?

As technology improves and the environment changes, the flood zones change. There are a variety of factors that impact flood insurance premiums as well as flood zones. As FEMA updates its approach to flood insurance, here are a few things to take into consideration when your flood insurance changes.

Changes In The Market Are Impacting Your Flood Insurance Rates

While inflation and market changes have been rampant over the first 20 years of the 21st century, the market has violently changed due to covid. The worth of your home has skyrocketed as the market favors buyers and lumber prices soar. A large sum of money has flooded the market with the recent stimulus plans and resulted in an excelled inflation rate.

Environmental & Water Table Changes Affect Your Flood Insurance

With environmental changes, increased development, and the sheer number of parking lots, water displacement has increased flash flooding, erosion, and increased flood zones. If a new home or a parking lot was placed near you, the square footage of land that is now concrete has displaced that amount of water.

As more and more locations are developed, a larger amount of water displacement occurs. Rather than the ground absorbing the water, it runs into streams and rivers. These combined environmental factors lead to increased flooding and, as a result, increased flood zones.

Think about how much your local town or county has changed in the past 20 years. That alone has played one of the largest roles in impacting the flood zone.

Technology & Data Can Change Your Flood Insurance

Along with flood zone changes, technology is continually advancing at a rapid pace. With those advancements, the NFIP is more and more equipped to predict when and where flood levels will rise. However, when the NFIP was first set up in 1968, the technology and maps used to create the flood planes were not at the same caliber they are today.

If the most advanced technology were to study your local town’s floodplain for 3 years, the NFIP could probably predict the flood levels and continued floodplain changes over the next 10 years. Using new and advanced technology to study the flood plain is helping to change flood insurance by making it more accurate.

FEMA Impacts Your Flood Insurance

Finally, FEMA impacts your flood insurance. FEMA and the NFIP work together as a government entity to determine effective flood insurance plans and rates. The upcoming changes they plan to make to flood insurance are in the interest of making it more accurate.

Why Is FEMA Updating Its Flood Insurance?

There is no denying that FEMA’s flood insurance is antiquated and motivated by too many factors that are not related to flood zones or protecting infrastructure within the United States. Unfortunately, this can still be seen, and families still feel the impact years after mass flood events.

Many areas still have yet to recover from hurricanes and flash floods. While FEMA’s flood insurance updates may result in higher prices for flood insurance, it is designed to take an outdated government program and work correctly for the people purchasing flood insurance.

What Is Risk Rating 2.0?

Risk Rating 2.0 is a new implementation by FEMA. Risk Rating 2.0 essentially means higher-risk flood plains will probably see an increase in flood insurance costs. This makes sense, just as home insurance is more if the home is a higher risk home with a trampoline or pool. Meanwhile, lower risk flood insurance will probably remain the same or only see a slight increase.

If I am in a lower-risk flood zone, why will I see my rates still increase? Because of the multiple reasons listed above. What are high-risk areas that could expect to see an increase in their flood insurance costs? According to Forbes, it is a lot of beachfront properties.

What The Changing Flood Zones Mean For Homeowners

It is extremely likely the flood insurance coverage for your home will increase. However, if you are nervous about the changes that are happening to federal flood insurance, you should consider trying private flood insurance. There are a lot of advantages to private flood insurance. At Strickler Insurance, we provide both private and federal flood insurance options. Contact us for a free flood insurance quote.