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Glossary

Preferred Risk Policy (PRP)

A Preferred Risk Policy is a lower-cost NFIP flood insurance option available to properties in moderate- to low-risk flood zones.

A Preferred Risk Policy, or PRP, is a lower-cost flood insurance policy available through the NFIP for properties located in moderate- to low-risk flood zones such as Zone X. It is often relevant after a successful LOMA or LOMR-F moves a property out of the SFHA, providing an affordable way to maintain voluntary flood coverage.

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Key takeaways

PRPs are available to properties in Zone B, Zone C, Zone X, and other non-SFHA zones.
They offer lower premiums than standard NFIP policies because the risk is lower.
After a LOMA, converting to a PRP is a common way to keep affordable coverage.
Note: FEMA's Risk Rating 2.0 has changed how some policies are priced, so PRP availability may vary.

Why it matters

Homeowners who get a LOMA often want to keep some flood coverage — a PRP makes that affordable.
Understanding the PRP option helps homeowners make an informed decision about insurance after a zone change.
The transition from mandatory high-risk coverage to a voluntary PRP can save hundreds or thousands of dollars annually.

Frequently asked questions

Who qualifies for a Preferred Risk Policy?

Properties in moderate- to low-risk flood zones (Zone B, C, X, or similar) in NFIP-participating communities are generally eligible. Properties that have received a LOMA moving them out of the SFHA typically qualify. Properties with a history of repeated flood losses may not be eligible.

How much does a Preferred Risk Policy cost?

PRP premiums have historically started at a few hundred dollars per year for basic coverage, making them significantly less expensive than standard-rated NFIP policies in high-risk zones. Exact pricing depends on the coverage amount and deductible you select.

Has Risk Rating 2.0 changed the Preferred Risk Policy?

Yes. Under FEMA's Risk Rating 2.0 methodology, the traditional PRP structure has been replaced with individually calculated rates that consider more factors than just flood zone. Some properties that previously qualified for a PRP may see different pricing under the new system. Contact your insurance agent for current rates.

Should I keep flood insurance after getting a LOMA?

FEMA recommends maintaining flood insurance even after a LOMA because flood risk is never truly zero. A PRP or similar low-cost policy provides financial protection against unexpected flooding from heavy rain, drainage failures, or unusual storms. The cost is typically modest compared to the potential damage from a flood event.