Risk Rating 2.0 Calculator

and

Sprinkles^TM Flood Insurance Premium Estimate Maps

Read Your Risk empowers home buyers with tools to avoid tragic flood loss. Mapped premium estimates help buyers identify areas where they can afford the insurance or avoid high risk / high premium areas entirely. And the Risk Rating 2.0 Calculator brings transparency to FEMA’s premium pricing enabling consumers to see what drives their flood insurance cost.

FEMA RISK RATING 2.0 BY ADDRESS

Read Your Risk generates Sprinkles^TM – maps of flood insurance premiums under the National Flood Insurance Program (NFIP). These premium estimates are based on the NFIP Risk Rating 2.0 methodology and publicly available geographic information. By using a standard set of structure and contract inputs, these maps permit an apples-to-apples comparison of flood insurance costs from property to property, showing how location drives premiums.

Sprinkles^TM Premium Estimate Maps allow you to visualize flood risk and make informed decisions that properly weigh flood insurance liability against location-based amenities. The maps also include “geographic rates”. These are rate values that incorporate all the location-based factors that go into calculating your premium and are key inputs to the Risk Rating 2.0 Calculator.

Flood Insurance Cost Calculator

The Risk Rating 2.0 Calculator allows you to estimate your premium under the National Flood Insurance Program (NFIP). It builds off the data in the Sprinkles^TM Premium Estimate Maps, allowing you to generate a customized estimate based on the structural makeup of your home and your insurance contract preferences. Get the geographic rates for your home / location of interest and plug them into the Risk Rating 2.0 Calculator; then adjust any of the structure or contract values to best reflect your home and desired contract.

Risk Rating 2.0 Inputs and How They Affect Your Premium

Below is a brief description of all the key inputs used in a Risk Rating 2.0 flood insurance premium and how they affect your premium. These are grouped by type / structural makeup of your home, insurance contract, and location.

Type and Structural Makeup:

Your premium is driven by your home type and how it was or will be constructed. The following decrease flood risk and result in lower premiums:

Insurance Contract:

Location:

Location drives risk:  Your premium is driven by how close your home is to water and how high that water needs to rise to seep inside.

States affected by hurricane driven flooding have higher rates. And areas protected by levees can have lower rates, and levee quality matters.

HOW IS RISK RATING 2.0 CALCULATED?

Risk Rating 2.0 starts with base rates that are a function of where you live:  Your state, your watershed, whether you live in a single-family home, and whether your home is protected by a levee. Base rates and multipliers are determined for each of six flood risk categories:

• Fluvial (riverine)
• Pluvial (rain ponding)
• Storm surge
• Tsunami
• Great Lakes; and
• Coastal erosion.

Rates are zero for categories where the risk does not apply (e.g., tsunami risk is zero unless you are near the west coast).

Stacked on these base rates are numerous multipliers that are a function of your location relative to water and the vertical distance from the water to your first floor. These multipliers typically have values close to 1.0. Values less than 1.0 provide a discount (e.g., 0.9 gives a 10% discount), while values greater than one increase premiums. Each multiplier is determined first by measuring a distance, location, elevation, or area. There are multipliers for:

• Distance to the nearest stream/river
• Elevation relative to nearest stream/river
• Upstream drainage area of nearest stream/river
• Elevation of the structure relative to the surrounding topography
• Distance to a Great Lake
• Elevation relative to that Great Lake’s long-term average water level
• Levee quality
• Distance to the coast
• Distance to the ocean
• Watershed (territory)

Calculations are performed for each home, each with its own unique geographic data and multipliers.

Additional multipliers are applied, representing the type and structural makeup of the home, including the type of foundation, number of floors in the home or floor of the apartment/condo, first floor height above adjacent ground, and flood mitigation such as flood vents and placing appliances above the first floor.

A third set of multipliers is then applied, representing the elements of the flood insurance contract including replacement value of the building and contents, the requested coverage and deductible values, and discount percentage for community participation in the Community Rating System.

The sum of rates for all peril categories is your initial premium. Note that there are numerous fees as well, and the final premium is the initial premium plus fees, discounts, factors, and surcharges.

Read Your Risk premium estimates are based directly on FEMA’s Risk Rating 2.0 methodology.

For more information, check out FEMA’s rating variable explainers at:

• RR 2.0 – Equity in Action: Rating Variables (Part 1)
• RR 2.0 – Equity in Action: Rating Variables (Part 2)

Learn More

Still curious about Risk Rating 2.0, the Risk Rating 2.0 Calculator, and/or Sprinkles Premium Estimate Maps? Try the blog articles below:

• • Projected Increase in National Flood Insurance Program (NFIP) Premiums under Risk Rating 2.0, by Zip Code

• • What’s not transparent about Risk Rating 2.0?

• • What is flood risk disclosure?

• • What’s the difference between geographic Risk Rating 2.0 flood insurance rate maps (FIRM 2.0), traditional FEMA flood insurance rate maps (FIRMs), and other flood risk maps?

• • Why I created the Risk Rating 2.0 Calculator.