Just like traditional property insurance carriers, the National Flood Insurance Program (NFIP) regularly updates their product and rates.  While these updates typically occur in April and October, this year we got a bonus change for January. The most recent changes, announced in October 2019, included updates to the federal flood program that took effect on April 1, 2020, and on January 1, 2021.
 
The April 2020 NFIP changes included a rate change, an increase to the reserve fund assessment fee percentage, flood-proofing guidelines for certain building types, and a discontinuation of the V-Zone Risk Rating form. 
 
The January 2021 NFIP changes are focused on Preferred Risk Policies (PRP) rate adjustments, and on adjustments to the multipliers used in calculating rates for Newly Mapped properties. 

• PRP’s are located in B, C, or X Flood Zones and meet certain requirements set forth by the NFIP to get “preferred rates”.  These policies will see a 14.9% rate increase in 2021.  Because the rate increase applies to premium and not fees and surcharges, customers will see an average increase of 12.5%.  This increase will also take effect for A99 and AR Zone policies, which can also qualify for PRP rates. 

• When a map change occurs, customers who have a policy within 13 months of the map change date will receive Newly Mapped rates, or PRP rates for the first year.  Those rates will increase on a multiplier set by the NFIP to catch them up to the rate charged for the Special Flood Hazard Area (SFHA) flood zone (A or V Flood Zones). The multipliers used in this calculation were also changed on January 1^st.   

 
This information is intended only as a summary of the changes to the NFIP program taking effect in January 2021. You can read the entire bulletin for the April 1, 2020 and January 1, 2021 NFIP program changes here.