The National Flood Insurance Program has announced a new initiative that it says will improve the way flood risk is determined by taking multiple factors into account when rating structures.
The current system determines rates by accounting for a single flood hazard. The new system, which will go into effect in 2020, will use variables such as different types of floods, the cost to rebuild homes or buildings, and the distance of buildings from water sources when calculating the ratings.
David Maurstad, chief executive of the NFIP, during a conference said the new system aims to provide more accurate rates for all customers based on their "unique risks" and give owners of lower-value properties "more equitable rates."
The new rates for single-family homes will be available to industry partners by April 1, 2020. They will go into effect nationwide for single-family homes on Oct. 1, 2020. A full timeline for implementation will be released in the coming weeks, Maurstad said.