National Flood Insurance Program (NFIP)

Congress created the National Flood Insurance Program (NFIP) in 1968 to help provide a means for property owners to financially protect themselves. The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

In addition to the resources below, more information is available on the ASFPM Flood Insurance Committee and ASFPM Position on NFIP Reform and Reauthorization webpages.

ASFPM Recommendations: Flood Insurance Affordability under the 2012 NFIP Reform Act (BW-12)

ASFPM Recommendations on 2012 NFIP Reform flood insurance affordability issues (3/2013)

Executive Summary:

ASFPM supports many of the provisions of the 2012 NFIP Reform bill, otherwise known as Biggert-Waters 2012, usually shortened to BW-12. A centerpiece of this reform bill was to make the NFIP more financially sound. At the time the bill passed (May 2012) and was signed (7-6-12), the NFIP was over $17 billion in debt to the US Treasury (taxpayer), with little chance the program could ever repay that debt (now, the program is $23 billion in debt to the Treasury , [expected to go to $25 billion as a result of Sandy]). As such, Congress looked closely at why the program was in debt and what could be changed to improve it. The changes include many provisions for significant increases in flood insurance premiums to move them toward full risk rates and other measures to improve the financial soundness of the NFIP. ASFPM supports fiscal soundness for the NFIP.

What the legislation did not address is the effects of the changes on policyholders and the affordability of flood insurance policies for those that truly cannot afford the increases. While there was a study included in BW-12 to examine affordability issues; it had no implementation mechanism. There are now a number of bills being proposed that would roll back the premiums or lengthen the time policyholders would have to move to full risk premium rates. This paper discusses BW-12, the need for a financially sound NFIP, and the options to address the affordability issue for lower income people who may not be able to afford the rate increases or for those who may need time to adjust to the premium increases.

ASFPM Report: "Flood Mapping for the Nation"

ASFPM Report: "Flood Mapping for the Nation" (3/2013)

Executive Summary:

The Association of State Floodplain Managers has developed an estimate, based on a careful analysis, of the total cost to provide floodplain mapping for all communities in the nation based on the parameters specified in the Biggert-Waters Flood Insurance Reform Act of 2012. The Nation has invested $4.3 billion in flood mapping to date, and has enjoyed multiple benefits from that investment, including providing the basis for guiding development that saves over $1 billion/year in flood damages. ASFPM has identified criteria of what constitutes adequate flood mapping for the country, and has produced an estimate showing the initial cost to provide flood mapping for the nation ranging from $4.5 billion to $7.5 billion. The steady-state cost to then maintain accurate and up-to-date flood maps ranges from $116 million to $275 million annually.[1] This national investment in a comprehensive, updated flood map inventory for every community in the nation will drive down costs and suffering of flooding on our nation and its citizens, as well as providing the best tool for managing flood risk and building sustainable communities.

[1] These estimates do not include revenue from the Federal policy fee which is primarily used to support administrative cost including the issuance of letter of map change, program management, and data dissemination.