FEMA Postpones Flood Insurance Changes for One Year

From Florida Realtors

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“Risk Rating 2.0” now goes into effect Oct. 1, 2021. Rather than rely heavily on flood zones to determine policy premiums, Risk Rating 2.0 will consider more variables and charge premiums that vary by home. 

WASHINGTON – The Federal Emergency Management Agency (FEMA) has postponed the roll-out date of Risk Rating 2.0 – its plan to update and extend the National Flood Insurance Program (NFIP). The original effective date of Oct. 1, 2020, has been moved back one year to Oct. 1, 2021.

WHAT IS THE NATIONAL FLOOD INSURANCE PROGRAM?

This federal program, which is crucial to the Florida real estate industry, helps keep insurance affordable. Take a look at why the NFIP is so important.LEARN MORE ►

“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,” FEMA said in a prepared statement. The extension will also allow “all National Flood Insurance Program (NFIP) policies – including, single-family homes, multi-unit and commercial properties – to change over to the new rating system at one time instead of a phased approach.”

Although the Risk Rating 2.0 program is still being developed, it’s expected to change the way NFIP calculates flood-insurance rates. As a result, it could save some homeowners money and raise the coverage cost for others.

Rather than levy premiums based on the dollar amount of insurance a homeowner wants, NFIP could operate more like traditional property insurance by weighing a roster of risk variables. Currently, rates are generally based on the amount of coverage a homeowner wants and the risk of flood their home faces – largely whether the home is inside or outside a FEMA-designated flood zone.

FEMA originally said the plan would consider multiple variables, such as the potential for hurricanes, a home’s distance from a body of water and its risk from coastal surges. It would also consider using new “loss-estimation technology” that predicts a home’s risk from climate change. It could also offer replacement cost coverage.

Florida – home to about 35 percent of all NFIP policies – could be impacted, though it’s not yet clear how a specific homeowner might be affected. However, it’s likely that some homeowners in FEMA flood zones would see flood insurance costs increase, and that potential for higher costs led some lawmakers to push for a Risk Rating 2.0 delay.

“We’re encouraged that FEMA is listening to Congress’s concerns about the impacts of Risk Rating 2.0. FEMA’s promise to protect policyholders and minimize any unintentional negative effects in the transition is vital to ensuring the NFIP remains successful,” according to a joint news release issued by six lawmakers, including three from Florida: Reps. Charlie Crist, Debbie Mucarsel-Powell and Francis Rooney.

NFIP currently expires on Nov. 21, 2019, and Congress is working on a solution to extend it for at least a few years. Should lawmakers reach agreement, it’s unclear how a legislative fix might impact FEMA’s Risk Rating 2.0 regulatory fix.

Under U.S. law, FEMA is limited in its ability to raise rates. It’s also unclear how those limitations might impact increases under NFIP’s new risk model.

© 2019 Florida Realtors®

6 ways to prepare now for hurricanes

Source: 6 ways to prepare now for hurricanes

eye of the storm image from outer space

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MIAMI – June 8, 2018 – The worst thing that people who live along coastlines can do is not to prepare for tropical storms and hurricanes.

According to the National Hurricane Center, the two key factors contributing to weather safety during hurricanes are preparing in advance for the risks and to act on those preparations when alerted by emergency officials.

The director of the National Hurricane Center, Rick Knabb, and AccuWeather Hurricane Expert Dan Kottlowski, outlined certain precautionary steps that people in areas impacted by hurricanes and tropical storms should take.

1. Evacuation planning
The main reason people have to evacuate during hurricanes is from a storm surge, which is an abnormal rise of water generated by a storm’s winds that can reach heights well over 20 feet and can span hundreds of miles of coastlines, according to the National Hurricane Center.

“Evacuation planning is number one on the list,” Knabb said.

Knabb urged that people find out today if they live in a hurricane evacuation area, which is an area in which residents must leave their homes in the event of a hurricane.

Local governments provide the public with information about evacuation areas and the evacuation plans, and Knabb recommended that people review this information in advance.

“Some people will actually test the evacuation route in good weather,” Kottlowski said. “Waiting until the day of the hurricane isn’t a smart idea since everyone will be in a heightened state of anxiety.”

While people who live in storm surge areas fall within areas that are urged to evacuate during a hurricane, people who live outside of these zones should still look into safety precautions during a hurricane.

Those who live in mobile homes and high rises may also have to evacuate even if they do not live in an evacuation area, Knabb said.

“It’s not just a beach front problem,” he added.

Pet owners should also have an evacuation plan for their pets. Many shelters offer places to keep pets.

2. Buy supplies
The most important thing that both Knabb and Kottlowski stressed was buying supplies well in advance and keeping those supplies on hand should evacuation be required.

“If you wait until the hurricane is on your doorsteps, you are going to be waiting in long lines and they could even be out of the stuff you need,” Knabb said.

Those living in evacuation areas should keep a hurricane kit handy that is stored in a way that is easy to grab and bring to an evacuation shelter.

While evacuation shelters do provide supplies, Kottlowski said, “Shelters can get overrun and may not have enough supplies.”

These kits should include water, food, blankets and clothing, as well as a first aid kit, battery-powered or hand-crank radio, flashlight and batteries, whistle to signal for help and local maps.

Kottlowski said he recommends that residents have their kits bagged up in a suitcase or plastic tub.

3. Check insurance coverage
Property owners and renters should be sure to insure their homes against flooding, something that Knabb said many people do not realize is not a part of standard home and renters insurance.

Tenants and home owners can contact their renters or home insurance provider to buy flood insurance, and they should do so even if they do not live right along the coastline.

“People might think that if they don’t live on the coast, then they won’t have a flooding problem,” Knabb said. “But if it can rain, it can flood.”

Car owners should also contact auto insurance companies and move their cars into an off-site location or secured building.

“You won’t be able to take every vehicle you own to the shelter, but if you leave the vehicle outside, it could be seriously damaged,” Kottlowski said.

4. Make copies of important documents
Those living in or near hurricane areas should make copies of proof of ownership documents of any property not limited to their homes, cars and boats. These documents can be stored in the hurricane kit or in any safe location that does not risk being damaged during the hurricane.

“If a hurricane levels your house, you have to prove that it is your house,” Kottlowski said.

5. Protect your home
Residents and tenants should inspect their homes to confirm that there is no damage that a hurricane could increase. Any issues with the overall structure should be repaired, including loose shingles or damaged roofs.

“Any possible compromises to the roof or house will become an open avenue for strong and gusty winds,” Kottlowski said.

Residences with yards should also make a list of anything laying on the ground outside that could get tossed into the air and become debris during high winds.

Kottlowski also said residents should purchase supplies, including plywood to cover windows and extra security to keep doors from blowing open, in advance, to secure their homes from damaging winds.

6. Back up your electronics
Aside from keeping extra batteries and chargers around during a hurricane, people are also encouraged to backup any electronic devices.

Knabb said data should be stored at an off-site location so that data can be recovered if something were to happen to the physical computer or device during a hurricane.

Businesses should take particular caution in backing up information and sending that information to a remote site.

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