Flood insurance discounts under FEMA’s Community Rating System range from 5% to 45%, depending on how aggressively your local government manages flood risk beyond federal minimums. The CRS is a voluntary program launched in 1990, and more than 1,500 communities take part today.1FEMA. Community Rating System If your community participates, the discount shows up automatically on your NFIP policy at renewal. You don’t apply for it, and you don’t need to prove anything about your individual property.
What Each Class Rating Discounts
CRS ranks communities from Class 10 (no discount) to Class 1 (45% off). Each step up requires 500 more credit points, earned by the local government through verified floodplain management activities.1FEMA. Community Rating System
- Class 10: no discount
- Class 9: 5%
- Class 8: 10%
- Class 7: 15%
- Class 6: 20%
- Class 5: 25%
- Class 4: 30%
- Class 3: 35%
- Class 2: 40%
- Class 1: 45%
Most participating communities hold ratings in the Class 7 to Class 9 range, where early investments in public outreach and basic regulatory upgrades produce the most accessible points. Class 1 is extraordinarily rare. As of early 2024, no community in the country had reached it; the highest-rated communities were at Class 2.2FEMA. CRS Eligible Communities – April 2024
How the Discount Is Calculated on Your Premium
Under FEMA’s Risk Rating 2.0 pricing, the CRS discount applies uniformly to every eligible NFIP policy in a participating community, regardless of whether the insured property sits inside or outside a Special Flood Hazard Area.3FEMA. Risk Rating 2.0 This is a change from older pricing, which treated properties outside high-risk zones differently. The old Preferred Risk Policy that gave lower rates to those properties no longer exists; FEMA eliminated it when Risk Rating 2.0 launched.4FEMA. Risk Rating 2.0 Frequently Asked Questions Today, if your community is Class 6, every eligible policyholder gets 20% off.
The percentage is not applied to your total bill. FEMA first deducts the expense and loss constants ($193 each for building and contents coverage) and any mitigation discounts that already apply, then applies the CRS percentage to what remains.5FEMA. Community Rating System (CRS) Discount Guide The practical result is that your actual dollar savings will be slightly less than the headline class percentage suggests. Policies subject to maximum or minimum rate caps can also see a smaller effective discount if the cap already pushes the premium below what the full percentage would produce.
Some policies get no CRS discount at all. Group Flood Insurance Policies and provisionally rated policies are excluded. So are policies on buildings that are in violation of community floodplain management regulations, until the violation is cleared. Communities still in the NFIP Emergency Program, which is the initial phase before full enrollment, are ineligible for CRS entirely.6FEMA. Community Rating System Discount Frequently Asked Questions
When a Rating Change Hits Your Policy
FEMA updates CRS classifications twice a year, in April and October. When your community earns a better class, the improved discount appears on your policy at the next renewal following the effective date.6FEMA. Community Rating System Discount Frequently Asked Questions A policy that renewed a week before an April update will not see the change until the following year.
Rating drops are less forgiving. When a community is downgraded, the lost discount is reflected at renewal without a phase-in. FEMA’s guidance notes that the resulting premium increase is not subject to the statutory annual increase cap that normally limits how fast NFIP premiums can rise.5FEMA. Community Rating System (CRS) Discount Guide Policyholders feel it right away.
What Your Community Does to Earn the Points
Credit points come from 19 specific activities organized into four series. Communities pick the mix that fits their geography and budget.
Public Information
These activities put flood risk information in front of residents: running a map lookup service so property owners can check their zone, mailing outreach materials, requiring hazard disclosures during real estate transactions, and keeping flood protection references in the public library.1FEMA. Community Rating System This series is usually the cheapest way for a community to pick up its first points.
Mapping and Regulations
This series offers some of the highest point totals and rewards building standards tougher than federal minimums. A common move is adopting freeboard requirements that force new construction to sit one or more feet above the base flood elevation. Preserving floodplain open space, enforcing stricter stormwater rules, maintaining better flood data, and adding coastal erosion protections all count here.
Flood Damage Reduction
These are the physical interventions: acquiring flood-prone properties and converting them to open space, relocating buildings, retrofitting existing structures, and keeping drainage systems maintained. Communities can also earn credit for substantial damage enforcement, which means having a plan to identify and act on buildings likely to be substantially damaged in a flood. A structure is substantially damaged when repair costs reach or exceed 50% of its market value, and the owner must bring it into compliance with current floodplain rules before rebuilding.7Federal Emergency Management Agency. Addendum to the 2017 CRS Coordinators Manual (2021)
Warning and Response
Preparedness activities earn points too: flood warning systems, inundation maps that show what specific areas look like at different flood levels, levee and flood control structure maintenance, and dam safety programs. All require documented plans and proof that warning systems are tested regularly.1FEMA. Community Rating System
How the Discount Can Disappear
CRS participation sits on top of basic NFIP compliance, so losing that compliance erases the discount and brings other costs with it.
If your community is placed on probation, flood insurance stays available but FEMA adds a $50 surcharge to every NFIP policy in the jurisdiction. The surcharge runs for at least a full year, even if the underlying violation is fixed quickly. FEMA must notify each policyholder at least 90 days before probation begins and alert local media at least 60 days ahead.8FEMA. Community Enrollment and Eligibility Handbook
Suspension is worse. New flood insurance cannot be sold and existing policies cannot be renewed inside a suspended community. Federal agencies also cannot approve loans, grants, or disaster assistance for construction within the Special Flood Hazard Area, and federally regulated lenders must warn buyers that federal disaster aid will not be available for SFHA properties there.8FEMA. Community Enrollment and Eligibility Handbook Because mortgage lenders require flood insurance in high-risk zones, suspension effectively freezes real estate transactions involving federally backed loans.
A single property can also lose coverage independently of its community’s status. Under Section 1316 of the National Flood Insurance Act, when a local authority formally declares that a specific structure violates floodplain management regulations, FEMA denies both new and renewal flood insurance on that building until the violation is corrected and the declaration is rescinded.9eCFR. 44 CFR Part 73 – Implementation of Section 1316 of the National Flood Insurance Act of 1968 The CRS discount cannot save a policy in that situation, because there is no policy to discount.