b'Historically, construction costs have increasedapproximately 2-3% annually. Therefore, every36 months, reconstruction costs would increaseapproximately 6-9%. If rates stay the same, butreplacement costs rise 6-9% in 36 months, theproperty premium would increase proportionallyor between 6-9%. Due to supply chain issuesrelated to COVID-19 and higher constructiondemands, costs are currently rising 6-10% peryear, depending on the buildings construction.The software has notupdated yet to these rising[construction] costs,but it is coming.Brad Felten, Co-Founder andManaging Member,FPAT Felten Property Assessment TeamAs Brad Felten, Co-Founder and ManagingMember at FPAT Felten Property AssessmentTeam explains,the software has not updated yetto these rising costs, but it is coming. If yourAssociation is due for a new appraisal in 2022,keep this in mind when budgeting for theupcoming year.National Flood Insurance Program (NFIP)The National Flood Insurance Program(NFIP) is the principal provider of flood insur-ance in Florida. The program is approximately20 billion dollars in debt and is undergoing amajor underwriting change. This change isnecessary and without it, sustainability of theprogram is dire.Risk rating 2.0Risk rating 2.0 is the NFIPs newest and mostadvanced insurance rating system. It will transi-tion policyholders to paying actuarially soundrates. The new methodology went into effectOctober 1, 2021 for new business and April 1,2022 for renewals. Most policy holders will seeincreases in their premiums. These increases arecapped at 18% annually.Looming Coverages and ExclusionsCost is important, but coverage, limits of liability,deductibles, and financial strength of carriers arevital to protecting an associations assets.ContinuedFWinter 2021 Suncoast Review - 9'