The Sugar Land City Council unanimously approved a resolution during an Aug. 3 meeting stating its opposition to the introduction of the Federal Emergency Management Agency’s (FEMA) Risk Rating 2.0, which is expected to result in increased flood insurance rates for the vast majority of policyholders in Fort Bend County.
The city’s concerns, Council Member Carol McCutcheon said, are a lack of transparency in the data, models, rates or program costs as well as the underlying assumptions used to formulate the new methodology.
“FEMA’s lack of transparency, lack of public review and input from state, city and county officials is very disappointing,” McCutcheon said.
Per FEMA’s National Flood Insurance Program (NFIP) guidelines, homes and businesses in high-risk flood areas with mortgages from government-backed lenders are required to have flood insurance.
Those insurance premiums have been calculated using the same methodology since the 1970s, per Rick Ramirez, the city’s intergovernmental relations manager.
“The new methodology will fundamentally change the way insurance premiums are calculated and may include making flood insurance mandatory for properties protected by levees even if they are accredited,” City Engineer Jessie Li said in a news release from Doug Adolph, the city’s communications director.
FEMA Risk Rating 2.0 will “calculate premiums more equitably across all policyholders based on the value of their home and individual property’s flood risk” according to a FEMA document outlining the planned changes to the organization’s flood mitigation policy.
The changes were announced on April 1 and are expected to roll out in two phases, with the initial switch to the Risk Rating 2.0 methodology beginning Oct. 1, and the second phase occurring on or after April 1, 2022 for all remaining flood insurance policyholders.
As a result, FEMA estimates that 77 percent of the 5 million NFIP policyholders nationwide will pay higher flood insurance rates under Risk Rating 2.0. In Texas, 86 percent of the 768,600 NFIP policyholders will see increased flood insurance rates, and in Fort Bend County, more than 95 percent of the 64,584 NFIP policyholders will see an increase.
“If you don't have it already, it's important to contact your insurance provider to get flood insurance as soon as possible to take advantage of being grandfathered into how fast your premium can increase,” Li said in a new release. “Remember, flood insurance policies take 30 days to go into effect, so you must purchase your policy by Sept. 1 for your policy to become effective prior to the effective date of Risk Rating 2.0 on Oct. 1. If you do have flood insurance, you should maintain your policy to remain grandfathered into the changes in rates.”
According to FEMA, flood hazard zones and elevation zones will no longer be the only factors used to calculate an insurance premium. The premium will reflect an individual property’s risk, as opposed to using a national average.
Other factors FEMA plans to consider in assessing risk and insurance premiums include flood frequencies and sources, and issues related to coastal areas such as erosion, distance to water, the type and size of the nearest bodies of water, a property’s elevation in relation to a body of water and whether or not a property is leveed.
The city seeks public input and review in compliance with the federal Administrative Procedure Act and the Information Quality Act, according to the city’s Resolution 21-16.
The resolution also insists that FEMA follow the federal rulemaking process as set forth by the Congressional Office of Management and Budget's (OMB's) Office of Information and Regulatory Affairs (OIRA).
The city also opposes the diversion of funds from the U.S. Army Corps of Engineers levee safety program intended for improvements to levee risk assessments, according to the resolution.