New Risk Rating System Will ‘Close Insurance Gap,’ FEMA Says
From Government Technology:
Ray Lehmann, director of finance, insurance and trade policy at the R Street Institute, said he is supportive of the approach that FEMA seems to be taking but has concerns that a lack of clarity could create a backlash.
“It gives me some déjà vu to 2013 and 2014 coming out of [the Biggert-Waters Flood Insurance Reform Act of 2012] where there was a lot of what I would call histrionics about what the rate changes would be that proved unproductive for reforms that were fought for pretty hard.”
Lehmann said that early coverage of Risk Rating 2.0 is and will be that people’s rates are going up, but that doesn’t reflect all the changes in the program. He noted that the caps for raising property rates in a year are generally 15 to 18 percent.
Lehmann said that addressing outdated flood mapping is a crucial part of reforming the program as some of the most flood-prone zones are on some of the most outdated flood maps. “The [Government Accountability Office] has done a lot of work on this and found that of the highest repetitive loss properties, an abnormally large number of them have maps that are more than 15 years old.”
