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By Lise Alves, Contributing Reporter

MIAMI BEACH, FLORIDA – The United States’ Federal Emergency Management Agency (FEMA) has postponed its plan to update and extend the National Flood Insurance Program (NFIP), dubbed Risk Rating 2.0 to October 1, 2021, so as to allow more time for homeowners to understand the new plan. The original date was October 1, 2020.

FEMA is delaying the update of flooding insurance premiums for places like Key West, Florida, Miami Beach, Miami, Florida, News
FEMA is delaying the update of flooding insurance premiums for places like Key West, Florida, photo courtesy of Monroe Country government.

“While the agency initially announced that new rates for all single-family homes would go into effect nationwide on October 1, 2020, some additional time is required to conduct a comprehensive analysis of the proposed rating structure so as to protect policyholders and minimize any unintentional negative effects of the transition,” stated FEMA in a press release.

The plan is expected to change the way NFIP calculates flood-insurance rates. Currently, say analysts, coastal residents, enjoy flood insurance policies that are cheaper than they should be thanks to FEMA’s outdated risk modeling, which doesn’t take into account sea level rise or tidal flooding.

According to FEMA, the extension will allow for all NFIP policies to switch to the new rating system all at once, instead of a phased approach, as originally proposed.

Congressional representatives welcomed the postponement. “We’re encouraged that FEMA is listening to Congress’s concerns about the impacts of Risk Rating 2.0,” said a joint news release issued by six lawmakers, including three from Florida: Representatives Charlie Crist, Debbie Mucarsel-Powell and Francis Rooney.

The biggest concern among lawmakers is the fear that insurance rates for their constituents will skyrocket with the updated system. Before the postponement, FEMA had announced that renewal premiums would increase an average of 11.3 percent, but argued that since ‘nearly 80 percent of policyholders already pay a full-risk rate [they] will therefore not experience this rate increase’. 

Many officials in Florida disagree. They say that the reauthorization of the NFIP, which is done approximately every five years, invariably increases insurance premiums.

“The reauthorization of NFIP, in 2012, gave us the infamous “Biggert-Waters” reforms (BW), which raised premiums significantly and phased out coverage for many. We saw specific examples of premiums increasing tenfold under the Biggert Water reforms,” states the Monroe Country, Florida website.

According to Florida Realtors, one of the state’s largest trade association, Florida is home to about 35 percent of all NFIP policies.

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