Starting last month, tens of thousands of flood insurance policy holders began seeing their premiums go down, due to a major overhaul by the Federal Emergency Management Agency of its risk rating system.
The National Flood Insurance Program (NFIP) is a FEMA-administered partnership among the federal government, he property and casualty insurance industry, states, local officials, lending institution, and property owners. It makes federally-backed flood insurance available in states and communities with flood-plain management ordinances in place.
215,000 property and business owners throughout California have flood insurance coverage through the NFIP. In Los Angeles County there are more than 17,600 NFIP policies and in Orange County, nearly 13,000 policies.
Although flooding is the costliest natural disaster facing our country, the risk rating system FEMA used to set NFIP insurance premiums hadn’t updated in many years. FEMA acted to rectify the situation with the development of Risk Rating 2.0, a methodology that leverages industry best practices and cutting-edge technology to set rates that are actuarily sound, equitable, simpler and better reflect a property’s flood risk.
Risk Rating 2.0 went into effect on April 1st and will reduce premiums for tens of thousands of policyholders in California.
Starting in April, more than 20% of Los Angeles County policyholders will see a rate reduction, with 38% seeing a premium reduction in Orange County.
As an insurance professional in Southern California, helping protect my clients is my priority. That protection requires me to properly access their risks, and work to obtain the appropriate policies that will meet their needs while always being mindful of costs.
FEMA’s implementation of Risk Rate 2.0 will provide needed financial relief and fairness to large numbers of property owners throughout Orange County and California.
Tim Wigmore is the owner of Wigmore Insurance Agency in Costa Mesa, a family-owned agency founded in since 1952.
