North Carolina: A Closer Look at 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 North Carolina and how they can impact your flood insurance in the future.

The Old North is known for its beautifully contrasting mountains and beaches. Being the ninth state with the most population, we want to help our friends over in North Carolina understand the upcoming change to federal flood insurance.

The National Flood Insurance Program is beginning to change and this will start with the Risk Rating 2.0. Considering that one whole side of the state is a coastline for the Atlantic, it's important to understand how federal flood insurance will change for a state that's at risk of coastal flooding.

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 start this one with good news or what you'll see in our graph as a green portion. This will affect 26% or 35,704 policies in North Carolina and generally reflects the good change because there will be a decrease in flood insurance rates for those who are included in this portion.

The decrease in FEMA policy rates will be more than $100 ($1200 per year). This type of change can really help those who aren't getting in the private flood market or want to continue their policies with FEMA.

The Bad

If there's good news, there is also bad news. This is represented by that blue portion in the graph which is composed of 65% or 91,719 policies from FEMA in the state.

This is what we call a bad change for these policyholders since there will be a small increase in flood insurance rates starting this October. Once the Risk Rating 2.0 takes effect, there will be an increase ranging from $0 to $10 per month ($0 - $120 per year). This means that you might not experience any change will flood insurance when you fall to that $0 or you can get up to a $10 increase.

The Ugly

Lastly, we want to talk about the ugly changes coming with the Risk Rating 2.0. This will be shown by the pink/magenta and grey portions respectively. Both of these will still deal with getting you an increase in the rates you have with FEMA.

Starting with the pink portion, 6% or 8,482 policies in North Carolina will get an increase ranging from $10 to $20 per month ($120 - $240 per year).

Whereas the grey portion will cover only 3% or 3,944 policies in the state. Despite having a small percentage, it's important to note that this will have the most drastic increase of more than $20 per month (>$240 per year). 

You can see the full pie graph of these changes coming to North Carolina 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 North Carolina, 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.