National Flood Insurance Program

The National Flood Insurance Program (NFIP) was established in 1968 to reduce flood losses and disaster relief costs by guiding future development away from flood hazard areas where practicable; by requiring flood resistant design and construction practices; and by transferring the costs of flood losses to the residents of floodplains through flood insurance premiums.

In return for availability of federally backed flood insurance, communities applying to join the NFIP must agree to adopt and enforce minimum flood loss reduction standards to regulate proposed development in special flood hazard areas as defined by the Federal Emergency Management Agency's (FEMA) flood maps. One of the strengths of the program has been keeping people away from flooding rather than keeping the flooding away from people - through historically expensive flood control projects.

The NFIP has approximately 4.4 million policies in force, representing over $370 billion worth of coverage, in 19,884 participating communities nationwide. Ninety-five percent of flood insurance policies are written by private companies and sold by more than 110,000 insurance agents and brokers participating in the NFIP's Write Your Own (WYO) program. Since 1969, over $12.1 billion in claims have been paid.

Currently, Nebraska has 13,300 policies in force representing $1.3 billion worth of coverage.

The Community Rating System (CRS) is a new program of the NFIP. It was created as an incentive mechanism aimed at recognizing and encouraging exemplary community floodplain management that exceeds minimum NFIP standards. Flood insurance premium rates are adjusted to reflect reduced risk resulting from community activities that meet the three goals of the CRS: reducing flood losses; facilitating accurate insurance rating; and promoting the awareness of flood insurance.

The NFIP has been successful in requiring new buildings to be protected from damage by the 100-year flood. The CRS provides an incentive for communities to do more than regulate construction of new buildings to the minimum national standards. Under the CRS, flood insurance premium rates are adjusted to reflect community activities designed to reduce flood damage to existing buildings, to manage development in areas not mapped by the NFIP, to protect new buildings beyond minimum NFIP protection level, to help insurance agents obtain flood data, and to help people obtain flood insurance.

Currently, policyholders in CRS participating communities can receive discounts from their policy premiums ranging from 5 percent to 45 percent!

(Source of information-NFIP)

Updated 8/26/03

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