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Flood 101

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What is the National Flood InsuranceProgram? A Federal program enabling property owners in participating

communities to purchase flood insurance protection

An alternative to disaster assistance

Based on an agreement between the community and the Federal Government.

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History of the NFIP

Section 1304 of the 1968 Act authorizes the Director of FEMA to establish and carry out “a national flood insurance program which will enable interested persons to purchase insurance against loss resulting from physical damage to or loss of real property or personal property” resulting from flood.

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Benefits of the NFIP Protects property owners

from risk

Lowers the cost to taxpayers

Helps businesses re-open

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Disaster assistance vs. Flood insurance Presidential declaration

S.B.A loans

Average Grants $2500

Loan payment on $50,000 is over $300 per month

Claims are always paid

No payback

Losses paid up to $250,000 on building and $100,000 on contents

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Mission of the NFIP

To educate American property owners about the risk of flood

To provide flood insurance

To accelerate recovery from flood

To mitigate future flood losses

To reduce the personal and national costs of disaster

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What is the Write Your Own (WYO) program? An agreement between FEMA and the insurance industry

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Introduction to Write-Your-Own Program

In 1981 the Federal Insurance Administrator (FIA) contracted :

insurance company representatives

Insurance trade organizations

In July of 1983 the “model” arrangement for the WYO Program was made final.

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On August 16, 1983, an invitation was extended to all licensed property insurance companies to participate in WYO for fiscal year 1984.

Since 1983 the WYO Program has become the primary vehicle for the delivery and service of flood insurance.

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Goals of the WYO program To increase the NFIP policy base

To improve service to the NFIP policyholders

To encourage private insurance industry’s participation in the flood insurance program

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The number of NFIP policies in force has increased from about 95,000 before the Flood Disaster Protection Act of 1973, to 2.2 million in 1989, to approximately 5.6 million currently.

As of January, 2010 -

The amount of flood insurance coverage in force is $1,218,776,526,200.

Written Premium is $3,198,025,198

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Top 5 States

Florida 2,146,451

Texas 682,874

Louisiana 483,326

California 275,491

New Jersey 228,982

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National Flood Insurance Fund

The instrument through which the Federal Government fulfills its financial responsibilities for the NFIP.

Annual revenue consists mostly of premiums and a Federal Policy fee on each policy sold or renewed.

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NFIP Debt

Borrowing authority:

$20.775 billion

Outstanding Treasury borrowing:

$18.75 billion as of March 2010

Most recent repayment:

$250 million in December 2009

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Who can buy flood insurance?

For any eligible structures

A homeowner, renter, or business owner residing in a participating community

There are 20,532 participating communities nationwide

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What buildings cannot be insured for flood?

Buildings in violation of floodplain management ordinances

New construction located in coastal barrier resource areas (CBRA Zones)

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What is the CommunityRating System?

Goal is to reduce flood losses

Provides incentives for carrying out activities above the minimum requirements

Each insured gets a 5% to 45% discount on their flood policy

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Is flood insurance mandatory?

National Flood Disaster Protection Act (1973)

Mandates the purchase of flood insurance under certain conditions if a property is in a Special Flood Hazard Area (SFHA).

National Flood Insurance Reform Act (1994)

Increases participation in the NFIP

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The Standard Flood Insurance Policy (SFIP)Three forms

Dwelling Form

General Property Form

Residential Condominium Building

Association Policy (RCBAP)

Effective 08/01/2004

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Policy term is one year

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Waiting Period

NFIP cannot “bind” coverage

Must wait 30 days from the date of application and premium presented before policy becomes effective

Does not apply when a new flood policy is required.

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Program Limits

Residential Building (1-4 family) $250,000

Contents $100,000

Other Residential (more than 4) $250,000

Contents $100,000

Non Residential Building $500,000

Contents $500,000

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NFIP Marketing

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NFIP Marketing Goals

Grow number of flood insurance policies in force by 5% annually

Lessen financial consequences of flooding for homeowners and small businesses

Increase understanding of the risks and consequences of flooding

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FloodSmart Marketing Campaign

FloodSmart Marketing Campaign Overview:

Informs the public about flood risks and the availability of flood insurance

Combats misconceptions

Engages partners and influencers

Connects consumers to agents

Provides useful tools for insurance agents

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Audiences

Consumers Homeowners, renters and businesses

Prospects, current policyholders and former policyholders

Agents/Industry

Influencers

Federal/Regional/State/Local Partners

FloodSmart Marketing Campaign

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Sources of Flooding

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• Testimonials of real life floods that occur from a number of sources

Sources of Flooding

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• Fact Sheets provided to local influencers and media outlets help outline localized messaging about flood risks

Sources of Flooding

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Combating Misconceptions

Combating Misconceptions • Messaging around misconceptions such as:

• Flood Insurance is too expensive• Homeowners insurance does cover flooding• How much damage a couple of inches of floodwater can cause in terms of cost• I don’t qualify/can’t get flood insurance• I don’t live near the water

• Tools such as:• Premium Estimator • Co-op ads for agents to help combat misconception • Commercials that speak directly to the misconceptions most people have

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Combating Misconceptions

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Combating Misconceptions

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Consequences

Messages such as: Two inches of water can leave you knee deep in debt

A flood can cost more than you think

Tools such as: Online Cost of Flooding tool

Ads showcasing the real life cost of a flood

Receipt samples of repair costs to accompany mailers

Consequence Messaging

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Consequence Messaging

“Use innovative ways to get people talking about preparedness actions with others” - Dennis S. Mileti

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Consequence Messaging

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Seasonality: Hurricane Season Outreach• Hurricane Season IS Flood Season messaging to urge

consumers to protect themselves from flooding during hurricane season

• Created a "hurricane season countdown clock" widget tool for agent and stakeholder websites which reminds their visitors just how much time they have to get ready for the upcoming Hurricane Season.

Relevant Triggers

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What is the application process for becoming a certified Adjuster?

The application form and information about the process and requirements are located on FEMA's Adjuster Participation in the NFIP page. For additional details regarding application submission and processing, please refer to the NFIP iServices page.

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How can I get a current year ID card?

For assistance with your ID card or certification application, contact NFIP iServices at iService_Claims@ostglobal.com or (301)386-6356.

I have forgotten my FCN (Flood Certification Number).

Contact the NFIP iServices help desk at iService_Claims@ostglobal.com or (301)386-6356.

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Where to get help?

WWW.FEMA.GOV

NFIP Regional Offices

FEMA Regional Offices

NFIP Web site

Tele-registration

Disaster Hotline

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Rethinking the NFIP

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FEMA is engaged in a comprehensive effort to address the concerns of the wide array of stakeholders involved in an ongoing dialog about the National Flood Insurance Program (NFIP).

The initiative is a multi-staged process designed to engage stakeholders and consider the largest breadth of public policy options.

FEMA believes this important process will ensure the program can efficiently and effectively meet the needs of the public. The results of this analysis will inform decisions regarding the future of the NFIP.

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Why is FEMA undertaking this effort?

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Who will be conducting the analysis?

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What process will FEMAuse in this analysis?

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What is the timeline for this effort?

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Will FEMA engagestakeholders through this process?

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NFIP Listening Session

Available from FEMA website at:http://www.fema.gov/business/nfip/nfip_listening_session.shtm

Congress

What’s next for the NFIP?

Stay tuned.