FEMA’s new Risk Rating 2.0 could mean lower flood insurance premiums

CHATTANOOGA,Tenn. (WDEF)- Good news for flood insurance policy holders.

FEMA’s new Risk Rating 2.0 could possibly lower your rates.

Broken Pipes, faulty drainage systems and normal flash flooding could all be reasons for your house to flood, according to American Restoration Water & Fire.

FEMA will now change the way that they calculate the flood risk for areas, which could mean lower premium prices for Tennessee policyholders.

Roy Wright says, “I think that it is going to open up an opportunity for more folks to say, ‘You know what, I do want to have the cover and see this risk eased back.'”

Wright is the CEO of Insurance Institute of Business and Home Safety.

He worked with FEMA on the Risk Rate 2.0 that takes a specific look at homes instead of a broader one.

“There are better practices available in the insurance industry that we can put to use. We think in doing so, it will make the pricing more specific and it will make sure that the pricing is fair”, adds Wright.

News 12 asked Kevin Walters, with Tennessee Department of Commerce & Insurance, how important it is to have flood insurance even if they might not be in a flood plain.

Walters says, “My family has peace of mind with a flood insurance policy. I want to urge consumers to remember that a flood insurance policy can make the difference between a financial catastrophe and recovering and being resilient in the face of a natural disaster.”

The new rate schedule takes effect October 1st for new policyholders, and April 1st for those renewing existing policies.

Categories: Chattanooga, Consumer News, Featured, Hamilton County, Local News