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

New Hampshire is one of the states that's known for being impacted by major flood events like The Mother's Day Flood of 2006 and the Flood of April 2007. Considering that the state is relatively close to extreme flood hazards especially during the hurricane season like the coasts, this is something to be expected. There's always this flood risk from storms, coastal flooding, and flash floods.

However, it's something that we can always be prepared for.

Today, we look into the Granite State and home to the Purple Finch, New Hampshire in the goals to understand the upcoming changes with federal flood insurance. The National Flood Insurance Program (NFIP) is about to change and a lot of updates are coming with the Risk Rating 2.0 especially when it comes to flood insurance rates with FEMA.

The Risk Rating 2.0 is expected to take effect on October 1, 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. 

Keep in mind that the National Flood Insurance Program (NFIP) and FEMA are constantly studying flood data across the united states. As a property owner, this also means that the market value of your residential property or commercial building isn't the only thing that is used to assess your final flood insurance premiums with FEMA. You also have to consider the following things:

• Flood map designation and flood plain devolvement in the community
• Overall risk of flooding, flood hazard, and flood frequency on your home
• History of flood loss, and flood damage
• History and frequency of flood claims
• Mitigation efforts to lower flood risk like making sure that your lowest floor is above the base flood elevation

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

We'll start off with the good things coming with the Risk Rating 2.0 and that's going to be shown as the green portion on our pie graph.

This will impact 35% or 2,675 active FEMA policies in New Hampshire. We call this a good change because it will cause a significant decrease in flood insurance rates for those people. The decrease may go up to more than $100 ($1200 per year) and can be an immediate one. This means by October, if you're part of this change, you're going to start paying for much lower rates with FEMA.

The Bad

Now, let's move over to a bigger chunk with the New Hampshire Risk Rating 2.0 update which is the blue portion. This is notably a bad change compared to the green one since all this entails is a small increase in rates starting this October.

The blue portion is composed of 49% or 3,875 FEMA policies from the state. If you're part of this, you're going to start to get an increase on your FEMA flood rates ranging from $0 to $10 per month ($0 - $120 per year). This can either mean that you're going to get no change with your rates and premiums, or it can go up to that $10/$120 mark once the NFIP 2.0 starts in October.

The Ugly

Lastly, we want to talk about the ugly changes which we'll show as the pink/magenta and grey portions. Now, both of these will still get you an increase on flood insurance rates with FEMA however it's important to note that the latter is definitely a much uglier change compared to the former.

The pink/magenta slice will be composed of 682 policies or 9% of the active FEMA flood insurance policies in New Hampshire. These 682 people will have to face a slightly bigger increase compared to the blue slice since the rate increase will now range from $10 to $20 per month ($120 - $240 per year). 

On the other hand, the grey slice will cover 515 or 7% of the policies that FEMA has in the state. Now, we call this the uglier change because the rate increase is drastically higher among the others. The increase will be more than $20 per month (>$240 per year) which generally means that you might even get a $100 increase on your flood insurance rate with FEMA starting October.

You can see the full New Hampshire NFIP 2.0 pie graph 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 New Hampshire, 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.