Missouri 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 Missouri and how they can impact your flood insurance in the future.

Previously, we've covered one of the states that have been victimized by floods throughout the years. If you even look at the past 100 years this was the case for certain states in the United States and today we're going to cover another state that has a long history of flood: the Show-Me State of Missouri.

We'll show you the upcoming changes as the National Flood Insurance Program (NFIP) prepares to fully roll out the upcoming Risk Rating 2.0. For a state like Missouri where flooding can happen anytime even with small amounts of rainfall, we want you to understand what's staying, changing, and the overall impact of this update on federal flood insurance.

The NFIP Risk Rating 2.0 is bound to take effect 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. 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 premiums as this would now be based on the value of your property or home starting this October. 

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.

The Good

Let's go over the good things coming to Missouri residents once the Risk Rating 2.0 takes effect across the U.S. We'll show this as the green slice of the pie graph.

The good change is expected to be experienced by 30% or 5,840 policyholders. This will get you an immediate decrease of more than $100 ($1200 per year) on FEMA policy rates. Considering that a lot of properties are in high-risk flood zones or special flood hazard areas (SFHA) due to the state's proximity to bodies of water specifically the Mississippi River, this can really help with that expensive federal flood insurance premiums.

The Bad

Now, we'll move into the blue slice which is also the biggest slice in this Risk Rating 2.0 change coming to the state. We call this a bad change because it's going to give an increase in rates for policyholders.

The increase will range from $0 to $10 per month ($0 - $120 per year) and is expected to impact 54% or 10,719 policies from FEMA in the state. For some this may sound tolerable however you have to keep in mind that being in this high-risk flood zone especially properties close to rivers, lakes, reservoirs, and all that can get you very expensive premiums with FEMA.

The Ugly

Lastly, let's look at the most significant changes coming with the Risk Rating 2.0. Now, these slices may show up as the smallest however this is one of the "small but terrible" situations.

The pink slice will cover 9% or 1,702 policies in Missouri. This is what we consider a less ugly change since the increase has a range. The increase in rates will range from $10 to $20 per month ($120 - $240 per year).

The grey slice on the other hand will be a drastic increase to rates with FEMA policies. This slice will cover 7% or 1,448 policies in the state and will bring that increase to more than $20 per month (>$240 per year). This is why it's the uglier change between these two since you might even encounter an increase of $100 per month.

The full pie graph can be seen below:

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 Missouri, 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.