FEMA adopted the National Flood Insurance Program's (NFIP) pricing approach called Risk Rating 2.0 starting April 1, 2023. This allowed FEMA's rates to become more equitable and flexible (fema.gov). Their 1970s legacy methodology was based on relatively static property elevation data within flood zones on a Flood Insurance Rate Map (FIRM). The new methodology assesses individual property risk by incorporating data like distance to water, historical flood data, and types of flooding (e.g., rainfall-driven, coastal, riverine).
The new approach comes with new guidance in factoring levee quality into premiums. The bottom line? Most flood insurance policy holders protected by the Miami Conservancy District's flood protection system saw reduced rates with the implementation of Risk Raking 2.0.
Chief of Technical and Engineering Services at Miami Conservancy District, Barry Puskas, worked on FEMA mapping during his time at USGS. “I have been involved with all the FEMA mapping update projects since 2009. In general, the base flood elevations (BFEs) reduced about four feet and removed numerous homes from the floodplain, saving them from the required flood insurance if they had a federally backed mortgage."
The reduction of fur feet from the regional floodplain allowed many property owners to avoid mandatory flood insurance. FEMA has since adopted the newer NFIP methodology and they continue to utilize the FIRM which was informed by this study among others.
View the study (USGS SIR 2009-5177)
Why Mandatory Flood Insurance for Some Property Owners?
While the Miami Conservancy District cannot control these federal requirements, the presence of the system does reduce costs for these property owners. Homes and businesses in high-risk flood areas with mortgages from government-backed lenders may still be required to have flood insurance. Some examples of government-backed lenders are VA loans, FHA loans, Main Street lending programs, Fannie Mae, and Freddie Mac. About 50% of mortgage loans in the United States are backed by government-sponsored entities (GSEs).
Looking To the Future: Levee Accreditation
Miami Conservancy District levees must undergo FEMA’s costly accreditation process, yet no dedicated funding source currently exists. If the levee is not accredited, the area will be mapped as a high-risk area, known as a Special Flood Hazard Area, or SFHA. In this case, the NFIP floodplain management regulations must be enforced, and the federal mandatory purchase of flood insurance applies. A lack of maintaining proper accreditation could mean deterring future riverfront development, different building requirements that would impact current and future development, and higher, mandated costs of flood insurance for those areas affected.
Securing sustainable funding sources will be necessary to continue to ensure our levees are accredited to FEMA standards and continue to protect these lowered rates.
Related documents
NFIP and Levees: An Overview (FEMA Fact Sheet) Meeting the Criteria for Accrediting Levee Systems on Flood Insurance Rate Maps (FEMA Fact Sheet)
