It is a new methodology for rating the flood risk of individual properties. Risk Rating 2.0 was implemented this year by FEMA at the direction of Congress to move NFIP in the direction of increasing premiums. Monroe County continues to advocate for and support federal legislation such as the 2021 NFIP-RE Act and the 2019 SAFE Act, which will cap annual increases to under 10%, as well as other responsible reforms to keep the program financial stable while providing affordable coverage. There is a number of structural and programmatic changes, other than premium increases, that could be introduced that would save the program money and lower future payouts that would bring financial stability to the program, and Monroe County supports these as the alternative to simply raising premiums. In 2014, Congress passed the Homeowners Flood Insurance Affordability Act requiring gradual insurance rate increase for NFIP-insured properties, with the goal of getting each property to a premium that reflects its “actuarial risk.” HFIAA requires annual increases of no less than 15 percent annually (but no more than 18 percent) for primary homes and 25 percent for all other properties. Unfortunately, Congress and FEMA have targeted the need to increase premiums as the way to “fix” the program. The program is currently in $25B in debt (to the US Treasury.)Īs a result, calls are increasing for reforms to the program to eliminate this debt and require the program to operate in an actuarially sound way. Flooding is an ongoing and ever more expensive disaster. NFIP’s affordable flood insurance protection for homes and commercial properties is important because it is protective of the economic engines that coastal communities represent to the State of Florida and nationwide.Īfter Hurricanes Katrina and Sandy, the NFIP went into debt, having to pay out far more in claims than it was taking in through premium payments. Its affordability is an important pocketbook issue for our constituents, as well as for our overall local, regional, and Statewide economies.Ĭoastal communities generate 80 percent of the State of Florida’s GDP and 46 percent of the entire national GDP. With the vast majority of Monroe County property owners insured by NFIP, the cost of flood insurance is a significant component of our property values, housing costs, and cost of living. (30,268 policyholders, with more than $7.5 billion in insured value.) With the highest percentage of properties insured with NFIP, Monroe County is one of the most impacted counties in Florida. (1.7 million policies with $440 billion in total coverage.) With more policyholders in NFIP than any other State, Florida is the most impacted and greatest beneficiary of the NFIP. NFIP is administered by FEMA, and contracts with private insurers to write and administer individual policies (they are not the providers of insurance coverage.) Flood risk is so great in coastal states that the private market is not willing to write policies that would be affordable to most property owners. The National Flood Insurance Program is a federal program enacted in 1968 to provide affordable flood insurance to property owners who may be at risk for flooding. Fl ooding in Key West during Hurricane Wilma in 2005.
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