On April 1, homeowners will see a new system for FEMA’s National Flood Insurance Program rating platform called Risk Rating 2.0.
It is a highly controversial system that is replacing one that was used for 50 years and one, some fear could drive many people to decide to live and/or buy elsewhere, since they won’t be able to afford flood insurance.
However, a bi-partisan bill introduced in Congress could force FEMA to become more transparent on how it determined its flood ratings.
US Sens. Bill Cassidy (R-LA) and Kirsten Gillibrand (D-NY) on Wednesday introduced the Flood Insurance Pricing Transparency Act, which would require FEMA to publish the formulas used to calculate mitigation credits for policyholders under Risk Rating 2.0.
It also requires FEMA to release a toolkit that could be used to estimate the cost of insurance for new construction.
This would allow homeowners or prospective homeowners to calculate what they can afford to pay for flood insurance.
“It’s a baby step in the right direction, but much more work needs to be done. This isn’t a Democratic or Republican issue,” Cape Coral Council member Gloria Tate said Wednesday. “We now have more people aware of the issue and that made an amendment to what we currently have. It was dormant, but now it’s moving again.”
“We already have an affordable housing crisis here anyway, for that to happen, it would make owning a home unaffordable,” Council member Jennifer Nelson said. “I was happy there was a new bill presented Tuesday which would make FEMA show how they achieved their formulas.”
FEMA plans to allow Risk Rating 2.0 to go into full effect on April 1 despite the widespread uncertainty as to how it will impact millions of homeowners who live in eastern coastal states such as Florida.
Others in Florida are involved as well. US Sen. Marco Rubio has drafted an amendment to the bill that would reduce the 18 percent rate increase cap insurance companies charge for flood insurance to 7 percent.
Also, the state legislature is dealing with the issue of insurers leaving the state and canceling policies for people with older roofs and homes.
Torte reform needs to happen, Tate said.
Whatever the case, Nelson said residents need to be prepared for the worst and hope for the best.
“Whether that will pass, we don’t know. Don’t cancel your flood insurance. Keep what you have because if you cancel and can’t get back in, it could cost a lot more money,” Nelson said.
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