The FEMA 2.0 changes are going to remove policies.

[Robert Murphy]

On October 1, 2021 the National Flood Insurance Program (NFIP) is changing things up. Since their inception 50 years ago they have been the only option for properties flood insurance. That's not true today with our growing private flood insurance markets. However, this post is about government policy.

The government is getting rid of the heavily subsidized Prefered Risk Policies (PRP) these are policies that were issued in X, X500, B or C flood zones, and the government historically has heavily subsidized these policies making the premium more favorable for the smart few that bought these policies. We are talking about a flood policy that is between $500 - $750 and is about 80% of the actual policies that the NFIP has on their books.

Warning - If you want one .....get it before October 1. There is a 30-day wait so really you should get it now.

The reason this would make so much sense to buy one now is you can grab a policy for $500 - $700 and FEMA. Risk Rating 2.0 will put this policy on what they call a "glide path" for the increases to the premium it will increase at the cap of 18% year over year until it reaches what FEMA considers the full risk premium. So an example is if the full risk for your premium is $2,500 you will have a few years at the 18% increase tell it gets to the full risk saving you money over the long hall. Be warned if you forget to pay just one year this subsidized policy is gone. So Even if your lender isn't requiring coverage however your investment buildings are close to any type of water or FEMA flood map. Get the policy.