By Wyatt Stewart
Risk Rating 2.0, FEMA’s new pricing methodology for the NFIP has been in place since Oct. 1, 2021. However, there is a significant change in agent responsibilities beginning with policies renewing on or after April 1, 2022.
For these policies to renew, agents may need to provide additional information. As the April 1 implementation date for all Risk Rating 2.0 renewals approaches, agents should review all communication from their Write Your Own (WYO) companies.
In many instances, agents will need to log in to the WYO company’s system and provide additional information regarding the NFIP policy. Among other things, this additional information could include construction type (masonry/frame), square footage of the structure, the replacement cost of the structure and/or the floor of the unit if it’s a condo. Failure to provide this information could result in a failure to renew and lapses of policies.
Many NFIP renewals benefit from congressionally mandated rate caps or a “glidepath,” and a lapse would cause the policyholder to lose that benefit and potentially experience very significant premium increases. Importantly, if an agency is not aware of, or does not complete these responsibilities, it will create an errors & omissions exposure for the agent.
Agents can find the latest information regarding Risk Rating 2.0 on FEMA’s website as the NFIP Services Page is updated with access to the latest documents for Risk Rating 2.0.
As FEMA continues to provide more information regarding Risk Rating 2.0, the Big “I” will continue to provide members with updates in the weekly News & Views e-newsletter.
Wyatt Stewart is Big “I” assistant vice president of federal government affairs.