On October 1, the National Flood Insurance Program's new pricing methodology, Risk Rating 2.0 begins Phase I. It applies to new and renewal policies effective October 1, 2021; Phase II is for remaining renewals on or after April 1, 2022. Risk Rating 2.0 is a revised rating methodology designed to more fairly set rates and ensure that both rate increases and decreases are fair to consumers. Flood insurance rates have been criticized for years as being unfair, and these changes are designed to reduce rates for those who have been paying more than their share in premiums based on the value of their homes. FEMA has collected $60 billion in premium but has paid out $96 billion in costs, something that is unsustainable.

Those receiving premium decreases will see an immediate drop in cost at renewal. Those whose premiums will increase will transition gradually until the full-risk rate is reached.

Projections show that on average, 23 percent of insureds will see a decrease of $86 in premium per month; 66 percent will see a $0-$10 increase per month, 7 percent will see a $10-$20 increase per month, and only 4 percent will see an increase greater than $20 per month.