Slide 1
NATIONAL FLOOD INSURANCE PROGRAM OVERVIEWMike Buckley, PEFormer
FEMA ExecutiveMay 27, 2015Istanbul, TurkeyNC CFS Training Seminar
October 2002Course 11ObjectivesUnderstand Historical and Political
context of U.S. flood control policies and practices
Understand interrelationship between flood hazard mapping,
floodplain management and insurance
Understand the evolution of the NFIP and the reasons for the
changesImpacts of Hurricanes Katrina and Sandy 0n NFIP
2NC CFS Training Seminar October 2002Course 12Historic Flood
Control in the US1726 - first levees on the Mississippi River
builtSwamp Land Act of 1849 and 18501858 1,000 miles of levees,
some 38 feet high
3
Floods in 1849 led to the SLA 49-50NC CFS Training Seminar
October 2002Course 13Earlier Flood Control Acts
Flood Control Acts of 1917, 1923, and 1928From 1930 through
1960, several additional Flood Control Laws were enactedAll of
these focused on structural measures to control flooding
4
Floods on the Mississippi, Ohio, and other rivers in the
Northeast led NC CFS Training Seminar October 2002Course
14Hurricane Betsy - 1965 BetsyKatrina
Large (40 mi eye) Category 4 Hurricane at landfallLevees along
Industrial Canal failed Cost $1.4B/$10BHomes flooded 164,000Lower
Ninth Ward Betsy
5
Katrina example included for comparison of tracksNC CFS Training
Seminar October 2002Course 15Post-Betsy ObservationsDespite flood
control efforts, costs to taxpayers for flood disaster relief
continued to escalate
Flood insurance coverage was not available
Nations flood risk areas unknown
No national standards for floodplain management6NC CFS Training
Seminar October 2002Course 16National Flood Insurance Act of
1968Established National Flood Insurance Program (NFIP)
Required mapping of flood prone areas
Made flood insurance available in communities that meet
floodplain management criteria
7NC CFS Training Seminar October 2002Course 17NFIP GoalsDecrease
loss of life and property
Increase importance of hazard mitigation Restore and protect
natural resources and functions of floodplains
Decrease taxpayer-funded disaster costs
Transfer cost to flood-prone occupants
Increase sustainability/livability8NC CFS Training Seminar
October 2002Course 18
Binghamton, NY., September 8, 2011
http://www.fema.gov/photodata/low/52954.jpgHow the NFIP WorksA
voluntary program based on a mutual agreement between the Federal
government and the local community:
In exchange for adopting and enforcing sound floodplain
management regulations, flood insurance is made available.
Three components: mapping, insurance, regulations
Sanctions for Non-Participation
No flood insurance availableNo Federal assistance for
acquisition or construction in high risk areasNo Federal disaster
assistance to repair or rebuild in high risk areas
NC CFS Training Seminar October 2002Course 19NFIP Roles and
ResponsibilitiesNC CFS Training Seminar October 2002Course
110Floodplain MappingFEMA produces Flood Insurance Studies and
Flood Insurance Rate Maps (FIRMs)100-year flood established as base
floodEngineering analyses of hydrology/hydraulics and wave action
(in coastal areas) produces Base Flood Elevations (BFEs)Flood maps
are prepared using topographic mapping (LiDAR preferred)Communities
may appeal changes to effective mapping; maps can be updated when
neededMaps are used to rate flood insurance and regulate
development
Flood Insurance Risk ZonesSpecial Flood Hazard Area (100-year;
Zones As and Vs)Zone AZone AEZone A0/AHZone A99/ARZone VE/V
(Coastal High Hazard Area)Other Zones (Moderate to Minimal
Risk)Zone X Shaded (500-year)Zone X UnshadedFlood Insurance Rate
Map (FIRM)
Additional Map Products
Flood Mapping Funding HistoryInflated Dollars ($6.2B)Original
Dollars ($4.3B)NFIP Floodplain RegulationsNew structuresLowest
floor of residential structures must be elevated at or above the
base flood elevation, plus any local/state freeboard Commercial
structures may be dry-floodproofed in lieu of elevationEnclosures
must have proper openingsCoastal considerationsLowest horizontal
structural member of structures must be elevated at or above the
base flood elevation, plus any local/state freeboard; structures
must be elevated on posts, piers, or pilingsNo fill or enclosures
larger than 300 sq ft
Substantially damaged or improved existing structures follow
standards for new construction
NC CFS Training Seminar October 2002Course 116Flood
InsuranceAvailable for structures in any flood zone within
participating NFIP communities
Flood Disaster Protection Act of 1973Followed Hurricane /TS
Agnes (1972)Represented significant expansion of provisions and
national impact of NFIPIncorporated mandatory purchase
requirementRequired participation in NFIP as condition for most
types of Federal financial assistance18
NC CFS Training Seminar October 2002Course 118Federal Flood
Insurance RequirementApplies to:Any structure,Mapped within a
Special Flood Hazard Area Offered as collateral for a federally
backed or regulated loanLenders may require the purchase of flood
insurance on their own
http://www.jeffersonriver.org/Real_Estate/images/Mansion_Flooding.jpgAll
three factors must be present or the mandatory purchase requirement
does not apply.
NC CFS Training Seminar October 2002Course 119
Insurance Sales and Service AgreementsSince mid-1980s FEMA has
established agreements with over 90 commercial insurance firms
under the Write Your Own programFirms conduct the sale and service
policies and claimsFEMA provides the funds for claims Compensation
under the agreement is for about 30% of premiumAbout 20% of the
policies are handled directly by FEMA through a contract
mechanism
Limits on Coverage1ST LAYER2ND LAYERTOTALBUILDINGSSINGLE
FAMILY$60,000 $190,000 $250,000 2-4 UNIT RESIDENTIAL$60,000
$190,000 $250,000 OTHER RESIDENTIAL$175,000 $75,000 $250,000
NON-RESIDENTIAL$175,000 $325,000 $500,000
CONTENTSRESIDENTIAL$25,000 $75,000 $100,000 NON-RESIDENTIAL$150,000
$350,000 $500,000 Pre-FIRM vs. Post-FIRMPre-FIRM policies are
discounted and flood insurance is not rated based on the actual
risk (averaging 40% of true risk)
Under new legislation, certain categories of Pre-FIRM structures
will lose discounts
Post-FIRM policies are rated based on the actual level of
risk
Pre-FIRMBuilt before initial FIRMorOn or before
12/31/1974Post-FIRMBuilt after initial FIRMorAfter
12/31/1974whichever is LATERFactors Used for RatingFlood zoneRates
from TableAmount deductibleLowest Floor ElevationBase Flood
ElevationBuilding typeFoundationAge (pre- or post-FIRM)
Flood Insurance RatingInsurance Rates Continue to RiseSample
Flood Insurance RatesResidential PRP and Pre-FIRMPreferred Risk
Policy - $412Pre-FIRM Non-Coastal Area - $3,289Pre-FIRM Coastal
Area - $7,173
Commercial PRP and Pre-FIRMPreferred Risk Policy -
$2,878Pre-FIRM Non-Coastal Area - $$13,743Pre-FIRM Coastal Area -
$37,970
Post FIRM rating requires an Elevation Certificate; premiums are
determined by comparing the lowest floor to the base flood
elevation
Residential rates based on $250,000 in building coverage and
$100,000 in contents coverage; no basement or enclosure; as of
January 1, 2013Commercial rates based on $500,000 in building
coverage and $500,000 in contents coverage; no basement or
enclosure; as of January 1, 2013
NC CFS Training Seminar October 2002Course 126Increased Cost of
Compliance (ICC)Up to $30,000 for flood mitigation measuresTo be
eligible, a structure must be considered either a substantially
damaged or repetitive loss structureNot available when a claim is
made for the policy maximum
Community Rating System (CRS)Voluntary incentive program
Communities must implement flood protection activities in excess
of the minimum NFIP requirements
Premium reductions of up to 45%
Goal is to reduce flood damages and encourage a comprehensive
approach to floodplain management
Latest Reform Acts (2012 & 2013)Phases out pre-FIRM
subsidies for policies which meet certain criteria
Increases annual rate increases from 10 to 20%
Requires a 10 year repayment plan for NFIP debt
Mandates various studies, including affordability and
privatization
29Subsidies removed for second homes on January 1, 2013Subsidies
removed for businesses, severe repetitive loss properties, new or
lapsed policies (as of July 6, 2012), and structures which have
received flood claims in excess of the buildings market value on
October 1, 2013Procedures concerning the removal of subsidies for
those affected by map changes have not yet been detailed. NC CFS
Training Seminar October 2002Course 129NFIP Today22,000
participating communities
5.4 million policies in force
$1.3 trillion in coverage
FEMA has mapped more than 150,000 square miles of high risk
flood hazard areas
Losses avoided - $20 billion30NC CFS Training Seminar October
2002Course 130Growth in PoliciesStates with Highest Number of
PolicesStatePoliciesInsurance in ForceWritten
PremiumFlorida2,054,803$478,878,463,100
$1,058,684,331Texas632,682160,882,144,000377,498,985Louisiana484,187113,562,271,700360,935,127California253,43566,816,086,700214,300,184New
Jersey246,89957,256,326,500240,239,397Total3,672,006877,395,292,000$2,251,658,024%
of Total66%68%60%Premium Income HistoryCoverage by YearNC CFS
Training Seminar October 2002Course 134NFIP Loss Payment History NC
CFS Training Seminar October 2002Course 135SummaryFederal
Government has been dealing with flooding since the mid-1800s but
began funding major structural projects early 1900s
NFIP established in response to increasing damages and offered
non-structural land use alternative to flood control projects
Mapping, regulations, and flood insurance procedures continue to
evolve
FEMA continues to provide disaster recovery and response
support, and encourages hazard mitigation actions36NC CFS Training
Seminar October 2002Course 136Major Challenges AheadRepayment of
$25 Billion Debt
Fully Implement Reform Acts
Maintain sufficient funding for mapping Address anticipated
impacts of climate change
[email protected]
NC CFS Training Seminar October 2002Course 138
0.2% Depth(500-Year)8.9 ft4.3 ft
1.7 ft#Depth grid uses/benefits: Mapping better delineation of
AO zones for shallow flooding areas (1, 2, 3ft) Overlay against
building footprints, critical facilities, or other site-specific
structure (superfund sites, above/below ground storage containers)
information to estimate potential risk Incorporation into Risk
Assessment tools, such as HAZUS BCA screening and project planning
Encourage Flood Insurance purchase outside of 100 year flood
boundary
34
