Idaho Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

The Federal Emergency Management Agency (FEMA) is rolling out changes when it comes to flood insurance rates across all states in the country. Today, we will unpack these changes coming to Idaho and how they can impact your flood insurance in the future.

Today, let's go down to the Gem State of Idaho to understand the upcoming changes that are going to come from the National Flood Insurance Program's (NFIP) new Risk Rating for flood insurance across the U.S. The state has a long history of floods, which have become the most common natural disaster that we're facing more than anything else, throughout the years and this is most evident when you look at its Creeks and the Boise River itself. These bodies of water are becoming more and more of a flood risk towards its communities.

This type of history is bound to impact flood insurance with the federal government, so we want to unpack the good, the bad, and the ugly changes for the cost of flood insurance in Idaho with the Risk Rating 2.0. We want to cover what will stay and what will be different once this update kicks in on October 1st, 2021.

The NFIP 2.0

The Risk Rating 2.0, or commonly known as NFIP 2.0 as well, is more of a move of equity in action. This update on the federal flood insurance program itself will allow you to no longer pay more than your fair share when it comes to flood insurance premiums as this would now be based on the value of your property or home starting this October. 

The current market value of the property will depend on the following:

• Flood map zoning
• How many of inch of water there is during rains and flood frequency
• History of flood claims and flood damage on the individual property
• The lowest grade compared to the state's base flood elevation levels
• Flood openings and other mitigation efforts

The flood insurance coverage from the NFIP will stay on that $250,000 for building damage and $100,000 for personal or contents damage and will still have to follow that 30-day waiting period for the federal flood insurance policy to take effect on your insured building.

When it comes to the rate changes happening across the country, you're going to see these colors in ranges which represent these changes with flood insurance rates from FEMA. Now, each of these colors represents the good, the bad, and the ugly changes coming to each state.

Nowadays, floods aren't the only threat we're facing, but it's also important to keep in mind that the actual flood risk you might be facing is not having the best protection and flood policy for your properties.

Let's unpack these and see what they mean for flood insurance.

The Good

First, we want to talk about one of the extreme ranges you'll see in this update or what we'd like to call the good change. This is generally represented by that green section and is what we call a good change because this will bring an immediate decrease of $100 ($1200 per year).

This is something that about 1,580 or 28% of the current active flood insurance policies from FEMA in the state of Idaho. The decrease itself can be very helpful especially if you're currently paying that premium that averages around $770.

This can really help a lot of people especially those who might be mapped into the high-risk flood zone like Flood Zone A, which are generally homes that sit relatively close to a natural water source or body of water like lakes, rivers, and creeks. This change helps those people to get the right coverage from flood damage through the federal government which is known to take on all risks.

Unlike the private flood insurance market, FEMA and the NFIP don't get to choose which risk they will take or simply put who they gave their flood insurance to. Despite having a significantly shorter waiting period on flood policies from private insurers, it's important to keep in mind that the private market can choose to opt-out of a community or overall reject a person's purchase of flood insurance due to how high the risk for flooding there is on that area.

The Bad

Now, we move forward to the next extreme range in these changes which is generally a bad change for those impacted. This blue range will impact 63% or 3,579 policies in Idaho and will bring an increase to your flood insurance rates of $0 to $10 per month ($0 - $120 per year).

This change can easily put your premiums up along the range of $800 to $900 easy depending on the value of your property. Although this isn't an immediate increase, once you move into these new Risk Rating changes, you're going to start paying for this higher rate.

The Ugly

Lastly, we want to move into the smallest sections of the changes which are separated by that pink and grey range in FEMA's reports. Here we're showing it as the pink section or slice and the grey section or slice. Let's dive into these two and understand why they're the ugly change.

First, we have the pink slice which will cover 6% or 317 FEMA policies in Idaho. This indicates an increase from $10 to $20 per month ($120 - $240 per year). The increase will easily bring your premiums to $900 or even $1000 once this change kicks in.

On the grey range, however, this brings the uglier change between the two and will impact 3% or 169 policies in Idaho. This will cause an increase to flood insurance rates of more than $20 per month (>$240 per year). This blows your premiums out of the water and into that $1000 or more.

Here's a full graph for the changes coming to Idaho:

When Will It Happen?

Now, the date when you can adopt this program really depends if you're doing a renewal or if it's a new business policy. You see, you can expect these changes to start on October 1st and you're going to adapt to these rate changes if you're buying flood insurance from FEMA on or after that date. 

On the other hand, if you're doing a renewal with FEMA after that date then you don't have to take in these new rate changes until April 1st, 2022.

So, you want to be very ready for this. We've been talking about this since last year since basically the NFIP is already 30 years old already and is in need of this change. 

If you have questions on these upcoming changes, what are your flood insurance options in Idaho, or anything about flood, reach out to us through the links below. You can also watch this on our YouTube channel.

Remember, we have an educational background in flood mitigation and we want to help you understand flood risks through education and awareness in flood insurance and preparedness.