Prior NFIP Claims History Rating Factor in Risk Rating 2.0

Like in other lines of insurance (e.g., auto, homeowners), NFIP flood insurance rates are affected by past claims. In the case of FEMA’s new rating methodology (known as Risk Rating 2.0), FEMA changed how that rating factor is applied starting April 1, 2023. Basically, the factor will now be based on future claims that occur within a 10-year rolling window after April 1, 2023. And, it is applied when there are two or more claims within that 10-year rolling window.

Premiums for all buildings identified as Severe Repetitive Loss (SRL) properties currently include a 15% SRL Surcharge. However, if going forward additional losses cause the SRL building to meet the above criteria and that factor results in a higher premium than the 15% surcharge, then the factor will apply instead of the 15% surcharge.

This updated information will be reflected in the October 2023 Flood Insurance Manual.  Meanwhile, more information can be found in FEMA’s March 2023 Bulletin.

Note that the NFIP Claims History can be reset by taking certain mitigation actions.  Read the Resetting Prior Claims History fact sheet for more details.