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What is the Risk Rating 2.0: Equity in Action?
On October 1, 2021, FEMA began implementing a new national flood insurance pricing methodology called Risk Rating 2.0: Equity in Action.
NAR supports Risk Rating 2.0, which uses modern risk assessment tools and property specific characteristics to more accurately price each home individually rather than by flood zone.
The new methodology only affects risk-based rates and does not change flood mapping or insurance mandates. Buyers may assume seller policies, and any increases cannot exceed 18 percent per year by law.
Where Can I Find More Information About FEMA’s Risk Rating 2.0: Equity in Action?
As FEMA implements the new pricing system, some owners and buyers may have questions about flood insurance rate changes. Real estate agents and brokers are an information source, not flood or insurance experts. You can provide the facts that every home in America has some flood risk, and a flood insurance rate quote from a licensed insurance professional can help your clients make better informed decisions. You can also be ready with contact information for a few NFIP and private market insurance agents, licensed surveyors/engineers, and other flood risk professionals (e.g., your local government floodplain manager) who can offer risk assessment and mitigation resources and answer property-specific questions.
NAR has developed the following comprehensive packet of educational information for NAR members to talk with customers about Risk Rating 2.0:
- Risk Rating 2.0 Takes Effect: What to Know (REALTOR® Magazine)
- NAR Myth Buster
- FEMA-NAR Flyer for Homeowners
- NAR Frequently Asked Questions (FAQs)
- NAR Member Legal Guidance
- NAR-FEMA Toolkit: Disaster Preparedness
- Video: NAR-FEMA Townhall
- Video: Flood Insurance & Disclosures: What You Need to Know Now
To learn more about Risk Rating 2.0: Equity in Action pricing system, please visit FEMA's dedicated webpage featuring comprehensive consumer resources.
