New Jersey residents will have a reprieve before flood insurance premiums will likely rise.
The Federal Emergency Management Agency (FEMA) was set to implement a new initiative, known as Risk Rating 2.0, designed to “deliver flood insurance rates that people trust, value, and are less complex to navigate,” beginning in Oct. 2020.
FEMA previously announced that National Flood Insurance Program premiums will increase an estimated average of $873 per policy to $972, or 11.3 percent. But nearly 80 percent of policyholders already paying the full-risk rate will not experience the increase, the agency said.
FEMA said the program would help homeowners to understand the true flooding risk to their properties and inform flooding mitigation measures.
But when federal lawmakers and advocates raised concerns about the program, citing transparency problems and considerably higher rates, the agency said it would delay implementation until Oct. 2021 to allow for additional time to conduct a “comprehensive analysis of the proposed rating structure so as to protect policyholders and minimize any unintentional negative effects of the transition.”
In a statement, Sen. Robert Menendez (D-N.J.) says he’s pleased about FEMA’s decision.
“Policyholders in New Jersey and around the country are understandably concerned about skyrocketing premiums that could result from flood insurance rules being changed in the middle of the game and this delay will at least provide some breathing room,” he said.
The senator added that the bipartisan legislation that he sponsored would fix the National Flood Insurance Program “by making insurance more affordable, reducing future damage by proactively investing in mitigation, and making the program more fair to policyholders and efficient for taxpayers.”