Aug 11, 2021

Charleston Flood Insurance & FEMA’s New Risk Rating 2.0

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Drew Grossklaus, Sales Director/BIC East Cooper

It is without a doubt that the coastal beauty of Charleston is one of its many charms. However, as we all know, coastal living brings with it with the risk of heavy storms, tidal flooding and unfortunately…hurricanes.

The issue of flood insurance affects many homes in the Lowcountry.  The Federal Government’s arm FEMA (Federal Emergency Management Agency) has long served as the organization that handles the massive issues and expense caused by flooding.  They created the National Flood Insurance Program (NFIP) which provides insurance to help reduce the socio-economic impact of floods.  This government backed insurance is available to anyone in the deemed flood zones and required by anyone who has a government backed mortgage and lives in a high-risk flood area.

Over the last few years, the program has been under immense scrutiny.  The costs and expenses of flood events have far exceeded expectations.  Questions arise over the amounts that are paid by individuals based on the value of their properties.  The cost of insurance for properties are further complicated by the risk rating system of where a property lies regarding bodies of water and land elevation.  In the past, it has taken acts of Congress to continue extending the program for months at a time as political questions about the program have festered.

As of October 1, 2021, FEMA will introduce its new Risk Rating 2.0.  FEMA is touting this new rating program, saying “this approach does not incorporate as many flooding variables as Risk Rating 2.0. Risk Rating 2.0 is not just a minor improvement, but a transformational leap forward. Risk Rating 2.0 enables FEMA to set rates that are fairer and ensures rate increases and decreases are both equitable.”

For coastal homeowners and real estate agents, it is a great sign that clarity and stability will come to light with the NFIP program.  As always, working with an educated real estate agent that is highly knowledgeable in flood insurance is of vital importance for home buyers and sellers in Charleston.  While we are always hopeful as homeowners that we won’t need to make a flood claim, having a strong understanding of flood insurance is one of the things that living in a coastal community brings.



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