2020 brought good news in regards to the National Flood Insurance Program (NFIP). The program saw a net income of $9.7 million and was reauthorized for a full year through September 20, 2021.
The pandemic had two positive impacts on the NFIP:
- Pivoting the new claims adjustment system, which allowed policyholders to use technology to file and participate in the claims adjustment process. Claims processing was shortened from 30 days to 24 hours with the new system.
- Extending the 30 day standard grace period. During the spring of 2020, the grace period was extended to 120 days for the first time ever.
Flood Insurance Budgeting for 2021 and Beyond
Due to the continued debt of the NFIP, the program has additional increased rates scheduled for April 2021 and January 2022.
Business and Condominium Policies should see the following rate increases:
- On April 1, 2021 – business and condominium policies rated in the A zone will see an increase of 1.5% – 3%.
- On January 1, 2022 – the Preferred Risk Policies rated in the X zone will see an increase of 13%.
Individual home renewal policies will start using a new rating system effective April 1, 2022. This is the largest single change to the National Flood Insurance Program in 50 years. Information on the new rates will be available on April 1, 2021 to the carriers who manage the flood program.
The new plan will implement easy to understand rating characteristics for a property:
- Distance to the coast or another flooding source
- Different types of flood risk
- The cost to rebuild a home – the system would generate lower rates for owners of lower-value homes
Deeley Insurance Group continues to monitor the progress of the NFIP as it adapts to changing climate and financial conditions.
We’ll share information as it becomes available to help you make informed decisions about protecting your property, so you can Be Sure.