Risk rate changes for thousands of Alabama flood insurance policy holders
TUSCALOOSA, Ala. (WBRC) - Changes are coming for many people in Alabama with flood insurance policies. They went into effect this past Friday.
Risk Rate 2.0 raises incentives for people and business to protect their property and allows the government to allocate resources toward flood mitigation projects instead of subsidizing insurance.
The changes match the risk rate so that people with a greater chance of having losses pay higher premiums. Vice versa, people with less risk will pay less on their flood insurance policies.
The Director of Insurance Information and Research at the University of Alabama said there are more than 54,000 flood insurance policy holders here in the state of Alabama.
“The number of them that will see an increase of more than $10 a month, which is kind of an arbitrary number, but will see those large price increases is about 1,700,” according to Lars Powell.
He adds the law states that insurance companies can’t increase your premiums for your first home by more than 18% in a given year.
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