In October, the National Flood Insurance Program began rolling out new, more realistic pricing for the primary source of property protection for those at risk from storms and floods.
Since then, new buyers of flood insurance have paid premiums under the Federal Emergency Management Agency’s âRisk Rating 2.0â system. The new rates will begin to be billed to existing policyholders in April, with increases limited to 18% per year.
FEMA said the new rating system more accurately reflects flood risk and ensures that national flood insurance will be there for generations to come. While basing rates on large floodplains and property elevations, the program now takes into account the property’s distance to water and the cost of reconstruction.
Most will be charged more for flood insurance, an average of $ 120 per year more to start. About 5% will see increases of over $ 240 per year, especially in coastal areas most prone to flooding. Nationally, the average premium for flood insurance is $ 700 per year, according to FEMA.
The new scoring system will be good news for the fifth of New Jerseyans covered by the program whose annual bonuses will drop.
Although the pricing method has changed, the requirement to purchase flood insurance has not yet changed.