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Posted on: September 29, 2021


Little red Monopoly houses in a puddle of water

The Federal Emergency Management Agency (FEMA) is implementing and fundamentally changing how it will rate a property’s flood insurance risk and prices with its Flood Risk Rating 2.0 methodology. The new methodology will affect all new National Flood Insurance Program (NFIP) rates in Monroe County starting Oct. 1, 2021, and existing policies beginning April 1, 2022. Flood Risk Rating 2.0 is a nationwide FEMA initiative, not just in Monroe County.

FEMA produced zip code level data to show where flood insurance rates are expected to decrease, increase, or remain the same. There are 30,799 active NFIP policies in Monroe County per FEMA’s data. In Monroe County, according to FEMA’s current data, 90.9 percent of policyholders will see an increase, 9.1 percent will see a reduction or no change. FEMA has not shared or released individual property data at this time. Individual policyholders should contact their insurance agent for how this will affect their premium.

“Monroe County has carefully monitored FEMA’s development and planned implementation of Risk Rating 2.0 since it was introduced several years ago. The impacts are heavily skewed against coastal communities, and we will continue to be a part of the nationwide discussion and its effects on Monroe County policyholders,” said Monroe County Legislative Affairs Director Lisa Tennyson. “Protecting affordable flood insurance is the number one federal legislative priority for Monroe County and has been since the Biggert-Waters reform in 2012.”

FEMA’s new methodology for determining NFIP policy premiums incorporates variables to reflect a property’s individual flood risk, including the frequency and types of flooding, such as storm surge, coastal erosion, and heavy rainfall — and the distance to a water source along with property characteristics, such as elevation and the cost to rebuild. Including a property’s replacement cost value in the new methodology was a major component in the new rates.

Per federal statutes, NFIP annual increases are capped at 18 percent for primary residential properties and 25 percent for second homes and commercial properties. The Risk Rating 2.0 increases cannot exceed the rate caps; however, Tennyson stresses that the current annual rate caps are already unaffordable for most Monroe County homeowners.

“Nationwide, the average policy is about $800, in the Florida Keys, people are paying $3000, $4000, $5000 for their policies. Annual rate increases of 18 percent are unstainable,” she said. “Monroe County’s main focus will continue to be on lowering the rate caps to under 10 percent.”

NFIP is a federal program that must be renewed by Congress every five years. Monroe County works with Monroe County’s federal delegation to advocate for a financially sustainable NFIP that provides affordable flood insurance for its constituents. With a maximum benefit of $250,000, the real beneficiaries of this program are working and middle-income homeowners and commercial property owners in coastal communities. Most multi-million-dollar homes in coastal areas are privately insured. 

Risk Rating 2.0, one of the most significant programmatic reforms to NFIP, has been done entirely at the agency level, without the input or approval of Congress. U.S. Senator Marco Rubio and U.S. Representative Carlos Gimenez support Monroe County’s efforts to reduce the impacts of premium increases, but there has been little overall Congressional action to date.

With Monroe County’s participation in the Community Rating System, policyholders in unincorporated Monroe County will see a 35 percent discount that will continue to be applied after Risk Rating 2.0 goes into effect.

For more information on flood insurance in Monroe County, visit FEMA’s zip code data for existing single-family home policies can be found at

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