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

Oregon has been through a lot of floods in more recent years and this is with heavy consideration to their long history of flooding just like most states. What’s notable is that in recent years, these flood events occur earlier in the year just before the spring season starts.

Considering that it’s most likely that the state of beaver state is prone to floods due to spring thaw, wherein the ice and snow from the previous winter starts to melt and seep in the ground which causes a lot of runoff as well as the constant possible threat of beavers causing a widespread flood.

Getting flood insurance policies is a great start for homeowners in preparing for flooding everywhere. However, this won't really get you much if you fall out of the updates and miss the upcoming changes. This is why it’s important that we cover the changes coming to the National Flood Insurance Program (NFIP) with the Risk Rating 2.0.

The Risk Rating 2.0 update will start 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. 

It's important to note however that there are a lot of things that will come into play when finalizing your flood insurance premiums with FEMA. You want to consider these things as well such as:

• Overall risk of flooding and flood frequency in an area
• History of flood damage and flood loss
• History and frequency of flood claims in the last 10 years
• Mitigation efforts made on the property. Is the lowest floor raised above the base flood elevation? Are there flood openings installed?

This is just to name a few, so as you can see this doesn't really mean that an expensive property will immediately get a rate increase and all people that have lower-valued homes will get a decrease.

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 National Flood Insurance Program provides coverage on flood damages to buildings which max to $250,000 on residential property and up to $500,000 on commercial property. This is with coverage on damaged contents or personal property that maxes to $100,000. If you're planning to go through FEMA for your policy, you will have to adjust to that expected 30-day waiting period. 

The Good

First, let’s start with the good changes coming to federal flood insurance rates. This will be shown by that green portion and will cover 30% or 7,511 policies in the state.

The good change will come in form of a decrease in flood insurance rates. The decrease may be up to more than $100 ($1200 per year). Since this change can be immediate, this can really help a lot of people who find it hard to manage flood policies with FEMA because of its more than usual price increases on flood policies.

The Bad

Now, let’s talk about the bad changes which will be in that blue portion of the graph.

This bad change is because generally, this portion represents a small increase in flood insurance rates. The increase will be ranging from $0 to $10 per month ($0 - $120 per year). This will impact about 58% or 14,399 policies in Oregon.

What this range means is that you might not even experience an increase if you fall down the $0 mark however it’s important to note that most of these properties in the blue portion will be getting up to a $10 increase with the Risk Rating 2.0.

The Ugly

Lastly, we want to cover the last two portions which are also the ugly changes. These will be in the form of the pink and grey portions in the graph. Both will bring an increase in rates significantly.

The pink portion will cover 8% or 1,942 policies in Beaver State. This will bring an increase to these residents ranging from $10 to $20 per month ($120 - $240 per year).

When it comes to the grey portion, we’re going to start to talk about the uglier change which will impact 4% or 1,000 policies in the state. This will cause you to get an increase of more than $20 per month (>$240 per year). The increase can easily go up to more than $100 per month (>$1200 per year) for some of the policyholders in the state.

You can see the full graph of these changes 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 Oregon, 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.