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National Flood Insurance Program (NFIP)


Before 1968, the federal government's flood initiatives consisted of disaster relief to victims in the event of a flood, or flood control projects such as dams, levees and seawalls.

While well-intentioned, this approach did little to ease the financial burden of most flood victims. Worse, the public couldn't buy flood coverage from most insurance companies, which regarded floods as too costly to insure.

Congress established the National Flood Insurance Program (NFIP) to address both the need for flood insurance and the need to lessen the devastating consequences of flooding. The goals of the program are twofold: to protect communities from potential flood damage through floodplain management, and to provide people with flood insurance.

For decades, the NFIP has been offering flood insurance to homeowners, renters and business owners, with the one condition that their communities adopt and enforce measures to help reduce the consequences of flooding.

Community Floodplain Management Activities

When a community chooses to join the NFIP, it must adopt and enforce minimum floodplain management standards for participation.

"Floodplain management" refers to an overall community program of corrective and preventive measures for reducing future flood damage. These measures generally include zoning, subdivision, or building requirements, and special-purpose floodplain ordinances.

FEMA works closely with state and local officials to identify flood hazard areas and flood risks. Floodplain management requirements within high-risk areas, known as Special Flood Hazard Areas (SFHAs), are designed to prevent new development from increasing the flood threat and to protect new and existing buildings from anticipated flood events.

Community Participation

Community participation in the NFIP is voluntary. Each community must assess its flood hazard and determine whether flood insurance and floodplain management would benefit the community's residents and economy. A community is an incorporated city, town, township, borough, village, tribe, or part of a county or parish that can enforce its own floodplain management ordinances.

More than 20,400 communities across the country have chosen to participate in the NFIP, and FEMA makes flood insurance available to their residents and businesses.

If a community does not participate in the NFIP, a lender can only offer a conventional loan and is still required to inspect any flood maps to determine flood hazard risk and provide notice of such risk. Therefore, a lender may require a borrower to obtain flood insurance even in the absence of a federally mandated requirement.

Risk Levels

FEMA conducts a Flood Insurance Study (FIS) of a region to identify the community's risk levels. The FIS includes statistical data for river flow, storm tides, rainfall and topographic surveys, as well as hydrologic and hydraulic analyses. After examining the FIS data, FEMA creates a map delineating the different areas of flood risk. Buildings in floodplains, or SFHAs, are at high risk for flood damage. Some floodplains experience frequent flooding, while others are affected only when there is a severe storm.

Each community that chooses to participate in the NFIP works closely with the FEMA. Together, they collect the information needed to create an accurate Flood Insurance Rate Map (FIRM) and FIS of the region. The FIRM and FIS will later be used to determine flood insurance rates for homeowners.

What is a Flood Insurance Study (FIS)?

A Flood Insurance Study (FIS) is a book that contains information regarding flooding in a community and is developed in conjunction with the FIRM. The FIS, also known as a flood elevation study, frequently contains a narrative of the flood history of a community and discusses the engineering methods used to develop the FIRMs. The study also contains flood profiles for studied flooding sources and can be used to determine base flood elevations for some areas.

Flood Insurance Rate Maps (FIRMs)

Your flood insurance rate is based on the level of flood risk. FEMA assesses flood risk for more than 20,400 communities nationwide, resulting in the publication of more than 80,000 individual FIRMs. These are selectively revised as communities grow, and as new or better scientific and technical data concerning flood risks become available.

Courtesy of FEMA - National Flood Insurance Program www.FloodSmart.gov