NFIP Written DocumentationCity of Southlake
Storm Water/Drainage
Frequently Asked Questions
National Flood Insurance Program (NFIP)
What is the National Flood Insurance Program (NFIP)?
1.
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, the Federal Government will make flood insurance available within the
community as a financial protection against flood losses.
Why was the NFIP established by Congress?
2.
For decades, the national response to flood disasters was generally limited to
constructing flood-control works such as dams, levees, sea-walls, and the like, and
providing disaster relief to flood victims. This approach did not reduce losses, nor did it
discourage unwise development. In some instances, it may have actually encouraged
additional development. To compound the problem, the public generally could not buy
flood coverage from insurance companies, and building techniques to reduce flood
damage were often overlooked.
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.
How was the NFIP established and who administers it?
3.
The U.S. Congress established the NFIP on August 1, 1968, with the passage of the
National Flood Insurance Act of 1968. The NFIP was broadened and modified with the
passage of the Flood Disaster Protection Act of 1973 and other legislative measures. It
was further modified by the National Flood Insurance Reform Act of 1994 and the Flood
Insurance Reform Act of 2004. The NFIP is administered by Federal Emergency
Management Agency (FEMA), a component of the Department of Homeland Security
(DHS).
What is a Special Flood Hazard Area (SFHA)?
4.
In support of the NFIP, FEMA identifies flood hazard areas throughout the U.S. and it's
territories by producing Flood Hazard Boundary Maps (FHBMs), Flood Insurance Rate
Maps (FIRMs), and Flood Boundary & Floodway Maps (FBFMs). Several areas of flood
hazards are commonly identified on these maps. One of these areas is the Special Flood
Hazard Area (SFHA) or high risk area defined as any land that would be inundated by a
flood having a 1-percent chance of occuring in any given year (also referred to as the
base flood).
The high-risk area standard constitutes a reasonable compromise between the need for
building restrictions to minimize potential loss of life and property and the economic
benefits to be derived from floodplain development. Development may take place within
the SFHA, provided that development complies with local floodplain management
ordinances, which must meet the minimum Federal requirements. Flood insurance is
required for insurable structures within high-risk areas to protect Federal financial
investments and assistance used for acquisition and/or construction purposes within
communities participating in the NFIP.
What is a flood?
5.
"Flood" is defined in the Standard Flood Insurance Policy (SFIP), in part, as:
A general and temporary condition of partial or complete inundation of two or more acres
of normally dry land area or of two or more properties (at least one of which is your
property) from overflow of inland or tidal waters, from unusual and rapid accumulation or
runoff of surface waters from any source, or from mudflow.
Do the state insurance regulators have any jurisdiction over the NFIP in their
6.
respective states?
As established by the U.S. Congress, the sale of flood insurance under the NFIP is
subject to the rules and regulations of FEMA. FEMA Division has elected to have State-
licensed insurance companies' agents and brokers sell flood insurance to consumers.
State regulators hold the insurance companies' agents and brokers accountable for
providing NFIP customers with the same standards and level of service that the States
require of them in selling their other lines of insurance.
Private insurance companies participating in the Write Your Own (WYO) Program must
be licensed and regulated by States to engage in the business of property insurance in
those States in which they wish to sell flood insurance.
How does the NFIP benefit property owners? Taxpayers? Communities?
7.
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.
What is the definition of a community?
8.
A community, as defined for the NFIP's purposes, is any State, area, or political
subdivision; any Indian tribe, authorized tribal organization, or Alaska native village, or
authorized native organization that has the authority to adopt and enforce floodplain
management ordinances for the area under its jurisdiction. In most cases, a community is
an incorporated city, town, township, borough, or village, or an unincorporated area of a
county or parish. However, some States have statutory authorities that vary from this
description.
Why is participation in the NFIP on a community basis rather than on an individual
9.
basis?
The National Flood Insurance Act of 1968 allows FEMA to make flood insurance
available only in those areas where the appropriate public body has adopted adequate
floodplain management regulations for its flood-prone areas. 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?
10.
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. However,
a community that chooses not to participate within 1 year after the flood hazard has been
identified and an NFIP map has been provided is subject to the ramifications explained in
the answer to Question 20.
A community's participation status can significantly affect current and future owners of
property located in Special Flood Hazard Areas (SFHAs). The decision should be made
with full awareness of the consequence of each action.
What is the NFIP's Regular Program?
11.
A community participating in the Regular Program of the NFIP is usually provided with a
Flood Insurance Rate Map (FIRM) and a detailed engineering study, termed a Flood
Insurance Study (FIS). (Additional information on FIRMs and FISs is provided in the
"Flood Hazard Assessment and Mapping Requirements" section of this booklet.) Under
the Regular Program, more comprehensive floodplain management requirements are
imposed on the community in exchange for higher amounts of flood insurance coverage.
What happens when a community does not enforce its floodplain management
12.
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 probation?
13.
Probation is the formal notification by FEMA to a community that its floodplain
management program does not meet NFIP criteria. It is an action authorized under
Federal regulations.
When can a community be placed on probation?
14.
A community can be placed on probation 90 days after FEMA provides written notice to
community officials of specific deficiencies. Probation generally is imposed only after
FEMA has consulted with the community and has not been able to resolve deficiencies.
The FEMA Regional Director has the authority to place communities on probation.
How long will probation last?
15.
Probation may be continued for up to 1 year after the community corrects all Program
deficiencies and remedies all violations to the maximum extent possible.
What penalties are imposed when a community is placed on probation?
16.
An additional $50 charge is added to the premium for each policy sold or renewed in the
community. The additional charge is effective for at least 1 year after the community's
probation period begins. The surcharge is intended to focus the attention of policyholders
on the community's non-compliance to help avoid suspension of the community, which
has serious adverse impacts on those policyholders. Probation does not affect the
availability of flood insurance.
What is suspension?
17.
Suspension of a participating community (usually after a period of probation) occurs when
the community fails to solve its compliance problems or fails to adopt an adequate
ordinance. The community is provided written notice of the impending suspension and
granted 30 days in which to show cause why it should not be suspended. Suspension is
imposed by FEMA. If suspended, the community becomes non-participating and flood
insurance policies cannot be written or renewed. Policies in force at the time of
suspension continue in force for the policy term.
What happens if a community does not participate in the NFIP?
18.
Flood insurance under the NFIP is not available within that community. Furthermore,
Section 202(a) of Public Law 93-234, as amended, prohibits Federal officers or agencies
from approving any form of financial assistance for acquisition or construction purposes in
a Special Flood Hazard Area (SFHA). For example, this would prohibit loans guaranteed
by the Department of Veterans Affairs, insured by the Federal Housing Administration, or
secured by the Rural Housing Services. Under Section 202(b) of Public Law 93-234, if a
Presidentially declared disaster occurs as a result of flooding in a non-participating
community, no Federal financial assistance can be provided for the permanent repair or
reconstruction of insurable buildings in SFHAs. Eligible applicants may receive those
forms of disaster assistance that are not related to permanent repair and reconstruction
of buildings.
If the community applies and is accepted into the NFIP within 6 months of a Presidential
disaster declaration, these limitations on Federal disaster assistance are lifted.
Explain the discounts on premiums that can be obtained in communities that
19.
qualify for the Community Rating System (CRS) because they have floodplain
management programs that go beyond the minimum requirements to participate in
the NFIP.
The NFIP's Community Rating System (CRS) recognizes community efforts beyond the
NFIP minimum standards by reducing flood insurance premiums for the community's
property owners. The discounts may range from 5 to 45 percent. The discounts provide
an incentive for new flood mitigation, planning, and preparedness activities that can help
save lives and protect property in the event of a flood.
What procedures must be followed for a community to participate in the
20.
Community Rating System?
Participation in the CRS is voluntary. A community in compliance with the rules and
regulations of the NFIP may apply. The community's Chief Executive Officer must appoint
a CRS coordinator to handle the application work and serve as the liaison between the
community and FEMA. The first step in the application process is for the community to
obtain a copy of the CRS Coordinator's Manual which describes the program and gives
details on the eligible activities. The CRS coordinator should fill out and submit an
application for participation in the CRS. The CRS will verify the information and arrange
for flood insurance premium discounts.