Glossary

Risk Rating 2.0

FEMA's current method of pricing NFIP flood policies by each home's own flood risk and rebuilding cost rather than mainly by flood zone and elevation.

Also called: NFIP pricing approach, RR 2.0, Equity in Action

Risk Rating 2.0 is the pricing approach FEMA uses for National Flood Insurance Program premiums. New policies were rated under it beginning October 1, 2021, existing policies moved at renewal from April 1, 2022, and FEMA says the rollout was fully implemented as of April 1, 2023.

Rather than relying mainly on the flood zone and base flood elevation, it prices each building using several variables: how often flooding is likely, multiple flood types (river overflow, storm surge, coastal erosion and heavy rainfall), distance to water, and building characteristics such as foundation type, first-floor height and rebuilding cost. Two neighbors in the same zone can pay noticeably different premiums.

Increases on existing policies are phased in. By law they are capped at 18% a year for most policyholders, before fees and surcharges, until the policy reaches its full-risk rate. That is why a premium can keep climbing for years after the first renewal.

Because price now tracks the building, upgrades such as raising the structure or adding flood openings can matter, and a new elevation certificate is optional. The zone still determines the lender's requirement. To see how the rating works, read the guide on how NFIP prices flood insurance now, and use the flood coverage gap calculator to size your coverage.

Last reviewed October 10, 2026

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Related terms

National Flood Insurance Program (NFIP) The federal program, run by FEMA since 1968, that makes flood insurance available to owners and renters in communities that adopt floodplain management rules. Flood zone A map designation, such as Zone AE, VE or X, that classifies a property's flood risk and helps decide whether a lender will require flood insurance. Base flood elevation (BFE) The height, in feet above a standard reference level, that floodwater is expected to reach in a flood with a 1% chance of occurring in any year. Elevation certificate A form completed by a licensed surveyor, engineer or architect that records a building's key elevations against the mapped base flood elevation. Special flood hazard area (SFHA) The land FEMA maps as having at least a 1% chance of flooding in any year, where lenders must require flood insurance on federally backed mortgages.

Related guides

Elevation certificates and your flood premium What a FEMA elevation certificate records, who must have one, whether it lowers an NFIP premium under Risk Rating 2.0, and how to find or order one. Do you need flood insurance outside a high-risk zone? Federal law requires flood insurance only in high-risk zones, yet FEMA says nearly a third of NFIP claims come from outside them. How to decide and when to buy. Elevating a home and other flood mitigation How elevation, flood openings, raised equipment, floodproofing and buyouts work, what each does to flood insurance premiums, and where the money comes from. Flood zones and FEMA flood maps explained What the A, V, X and D flood zones mean, how to look up your address on a FEMA map, what a zone changes for your lender, and how to contest one with a LOMA. NFIP flood insurance explained How the National Flood Insurance Program works: who sells it, what it covers (up to $250,000 building, $100,000 contents), what it excludes, and how it pays. Risk Rating 2.0: how NFIP prices flood insurance now Since 2021 FEMA prices NFIP flood policies by each property's own flood risk and rebuild cost, not by zone. What drives your rate, the 18% cap, how to lower it.