What is the National Flood Insurance Program (NFIP)?
The NFIP is a Federal program enabling property owners in participating communities to purchase insurance protection against losses from flooding. This insurance is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods. Participation in the NFIP is based on an agreement between local communities and the Federal Government that states if a community will adopt and enforce a floodplain management ordinance to reduce future flood risks to new construction in Special Flood Hazard Areas (SFHA), the Federal Government will make flood insurance available within the community as a financial protection against flood losses.
Why did congress establish the NFIP?
In the face of mounting flood losses and escalating costs of disaster relief to the general taxpayers, the U.S. Congress created the NFIP. The intent was to reduce future flood damage through community floodplain management ordinances, and provide protection for property owners against potential losses through an insurance mechanism that requires a premium to be paid for the protection.
What factors determine flood insurance premiums?
A number of factors determine premiums for the National Flood Insurance Program flood insurance coverage. Major factors include the amount of coverage purchased, the deductible, the location, age, occupancy and type of building. For newer structures in floodplains, the elevation of the lowest floor relative to the elevation of the 1% annual chance flood Base Flood Elevation or BFE will also be used to rate the policy.
When is flood insurance required?
Your home mortgage broker will require you to purchase flood insurance if you have a federally backed loan and your home is located in a Special Flood Hazard Area. The purchase of flood insurance is also required as a condition of receipt of Federal or federally backed financial assistance resulting from a federally declared flooding disaster.
How does the NFIP benefit property owners? Taxpayers? Communities?
Through the NFIP, property owners in participating communities are able to insure against flood losses. By employing wise floodplain management, a participating community can protect its citizens against much of the devastating financial loss resulting from flood disasters. Careful local management of development in the floodplains results in construction practices that can reduce flood losses and the high costs associated with flood disasters to all levels of government.
Why is purchasing flood insurance important to homeowners? Who needs flood insurance?
Everyone! Flood insurance is not just for people who live in the Special Flood Hazard Area (SFHA). During Tropical Storm Allison, 65% of the flooding was outside the SFHA, and nationally one out of every three flood loss claims are for structures outside the regulatory floodplain. If your home is located below the base flood elevation, you are more likely to flood than have your home burglarized or your car stolen. When you consider that repaying a $50,000 flood-related loan from the Small Business Administration costs about $300 a month over many years - while the average flood insurance policy runs about $300 annually - the savings in money and misery are obvious.
Considering the devastating consequences flooding can have, flood insurance is a wise and important investment. Homeowners insurance does not cover losses caused by flooding, but flood insurance provides coverage even if the President does not declare a disaster. Even if FEMA determines a structure is not in the designated floodplain, referred to as the Special Flood Hazard Area, the structure could be flooded by a flooding event with a greater magnitude than the base (1-percent-annual-chance) flood. FEMA estimates indicate that structures in designated SFHAs have a one-in-four chance of suffering flood damage during the term of a 30-year mortgage. The risk to structures located outside SFHAs is just not as great as the risk to structures located in SFHAs.
In addition, when floods destroy homes, not only are the homeowners left without a place to live, but also they are still obligated to pay off their mortgages. Flood insurance coverage is beneficial in that it protects the equity built up in a person's property, covers damage from flooding, and helps the insured recover more quickly and completely after a flood disaster.
What are the "grandfathering" rules of the NFIP?
To recognize policyholders who have either built in compliance with the flood map and/or remained loyal customers of the NFIP by maintaining continuous coverage, the NFIP has "grandfather" rules. These rules allow such policyholders to benefit in the rating for that building. For such buildings, the insured has the option of using the current rating criteria for that property or having the premium rate determined by using the BFE and/or flood zone on the old map in effect when the building was originally constructed (for those built in compliance) or when coverage was first obtained (for those with continuous coverage).
Can community residents qualify for "grandfathered" insurance rates if they purchase flood insurance now?
Yes, however if the new FEMA FIRMs do not change the flood hazard zone that your home is located in, your insurance rate would not change and, therefore, the grandfather rule would not need to be applied.
My house is currently not in the floodplain, should I buy flood insurance?
If your house is not in the floodplain, there is no mandatory requirement to purchase flood insurance. However, FEMA FIRMs only show the dangers from riverine flooding and most of the 65% of the area that flooded during Tropical Storm Allison was sheet flow flooding or flooding greater than the 1% flood that occurred outside the regulatory floodplains. It is recommended that all property owners purchase flood insurance.
If it is determined that my house is in a 1% (100-yr) or 0.2% (500-yr) floodplain, will I have to elevate my house?
No, your home will not need to be elevated. However, if your house sustains damages in excess of 50% of it value or you choose to improve the value of your house by more than 50% you will have to bring your house into compliance with local floodplain management regulations in order to be legally repaired or improved.
What elevation is used when rating a structure for a flood insurance policy?
The difference between the lowest floor elevation (including basement) of your structure and the Base Flood Elevation is used to determine the insurance rating. Note: Only buildings are insurable, other structures are not.
Why is participation in the NFIP on a community basis rather than on an individual basis?
Participation in the NFIP is on a community basis because it requires management of the entire floodplain as a whole. Individual citizens cannot regulate building or establish construction priorities for communities. Without community oversight of building activities in the floodplain, the best efforts of some to reduce future flood losses could be undermined or nullified by the careless building of others. Unless the community as a whole is practicing adequate flood hazard mitigation, the potential for loss will not be reduced sufficiently to affect disaster relief costs. Insurance rates also would reflect the probable higher losses that would result without local floodplain management enforcement activities.
Is community participation mandatory?
Community participation in the NFIP is voluntary (although some States require NFIP participation as part of their floodplain management program). Each identified flood-prone community must assess its flood hazard and determine whether flood insurance and floodplain management would benefit the community's residents and economy.
Is Harris County a NFIP community?
Yes, unincorporated Harris County is a NFIP community as well as the other 34 incorporated communities in the County.
What happens when a community does not enforce its floodplain management ordinance?
Communities are required to adopt and enforce a floodplain management ordinance that meets minimum NFIP requirements. Communities that do not enforce these ordinances can be placed on probation or suspended from the program. This is done only after FEMA has provided assistance to the community to help it become compliant.
What is the role of the community in floodplain management?
When the community chooses to join the NFIP, it must adopt and enforce minimum floodplain management standards for participation. The floodplain management requirements within the SFHA are designed to prevent new development from increasing the flood threat and to protect new and existing buildings from anticipated flood events.
When a community chooses to join the NFIP, it must require permits for all development in the SFHA and ensure that construction materials and methods used will minimize future flood damage. In return, the Federal Government makes flood insurance available for almost every building and its contents within the community.
Do the floodplain management measures required by the NFIP affect existing buildings?
The minimum Federal requirements affect existing buildings only when an existing building is substantially damaged or improved. There may also be situations where a building has been constructed in accordance with a local floodplain management ordinance, and the owner subsequently alters it in violation of the local building code, without a permit. Such unapproved modifications to an existing building may not meet the minimum Federal requirements.
Can modifications be made to the basic floodplain management requirements?
In developing their floodplain management ordinances, participating communities must meet at least the minimum regulatory standards issued by FEMA, however many communities have higher standards. Communities with higher standards can receive discounts on their flood insurance premiums.
Does elevating a structure on posts or pilings remove a building from the Special Flood Hazard Area?
Elevating a structure on posts or pilings does not remove a building from the SFHA and flood insurance will be required as a condition of receipt of Federal or Federally related financing for the structure. However, it does greatly reduce the cost of flood insurance if the bottom floor elevation is above the base flood elevation.
What is the role of the local community in its flood hazard assessment?
In conducting a Flood Insurance Study, FEMA looks to partner with local communities to assist in the mapping process and to gain the knowledge of the local community. With regard to TSARP, the Harris County Flood Control District is a Cooperating Technical Partner with FEMA. FEMA and the Harris County Flood Control District are sharing the cost of TSARP and working together to make sure that the final product is of the highest possible quality. All of the communities in Harris County have been involved in the process through several different committees that meet regularly to discuss issues regarding TSARP. Once the preliminary maps are produced all the citizens of Harris County will be able to comment on the maps and have the opportunity to file technical appeals through their local floodplain administrator.
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