The National Flood Insurance Program (NFIP)

Back in 2019, we wrote a post about the surprising connection between the Endangered Species Act (ESA) and the National Flood Insurance Program (NFIP). That post concluded with the following:

It looks like the Federal Emergency Management Agency (FEMA) will be forced to address ESA compliance on a state-by-state basis

On April 1, 2021, the Federal Emergency Management Agency (FEMA) released an official announcement (Release Number HQ-21-079) and Memorandum for Write Your Own (WYO) Principal Coordinators and the National Flood Insurance Program (NFIP) Direct Serving Agent (W-21003) outlining plans for implementing its new NFIP rating system known as Risk Rating

Most people would not associate flood insurance with the protection of endangered species. But over the past decade, the Federal Emergency Management Agency (FEMA) has been the target of multiple lawsuits alleging that the agency has violated the Endangered Species Act by not considering the impacts of its flood insurance

In a last minute move to avert a mini-financial disaster, today the Senate passed, and the president signed, a bill to extend the NFIP until November 30, 2018.  The House had previously passed a companion bill.  Demonstrating the broad support to keep the program running, the Senate passed the bill 86-12 and the president signed it within hours.

FEMA has announced that Roy Wright, the director of FEMA’s National Flood Insurance Program, is stepping down to take the helm of a nonprofit backed by the insurance industry.  We will be sorry to see Roy leave.  He was a great advocate for purchasing flood insurance, for sensible policies by

The National Flood Insurance Program (NFIP) will expire at the end of the month. For anyone that has read the newspaper lately, this is a lousy time for the program to expire with two hurricanes bearing down on the Eastern seaboard, and Texas’ largest city recovering from a 100-year storm. But politically, it is a wonderful time for the program to expire. First, there are suddenly many members of Congress motivated to ensure it doesn’t expire. Secondly, the risk of flood, and the shortfalls of the program, are fresh in our minds as we consider changes that might be made to the program as part of the reauthorization. While what will happen is still akin to a drinking game with people placing bets, here’s what we currently know.

Today’s post features commentary from guest author Julie Minerva.

I often joke with my clients that following issues too closely at the federal level can result in whiplash. To that regard, it has been a very active summer in Washington, DC on the water infrastructure front. Here’s a rapid fire look at some of the top items of interest that we are sure to hear more about in the fall. Try not to get whiplash.

Flooded AreaResearchers at UC Davis recently concluded that California should consider leaving the National Flood Insurance Program (NFIP) and explore implementation of its own statewide flood insurance program in order to invest in risk reduction rather than premiums.  This is an idea that has been talked about for years by state and local flood management experts.  But does it make sense?

The National Flood Insurance Program

The U.S. Congress established NFIP with the passage of the National Flood Insurance Act of 1968. NFIP is a Federal program enabling property owners in participating communities to purchase insurance as a protection against flood losses in exchange for state and community floodplain management regulations that reduce future flood damages. Participation in the NFIP is based on an agreement between communities and the Federal Emergency Management Agency (FEMA). If a community adopts and enforces a floodplain management ordinance to reduce future flood risk to new construction in floodplains, the government will make flood insurance available within the community as a financial protection against flood losses.

Flood Insurance. ProgramjpgPeople definitely care. But not enough people are likely to care to make a political issue out of it due to how the rate increases were designed. The National Flood Insurance Program (NFIP) rate increases called for by the last two acts of Congress are designed as slow and modest increases for the vast majority of folks holding policies. Indeed, this appears to be the reason Congress passed the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), in order to amend and soften the rate increases called for by the Biggert-Waters Flood Insurance Reform Act of 2012. During this current election year it takes a lot to get Congress focused on action, and the rate increases do not appear to fall on a large enough group to generate the noise that gets Congress’ attention. Added to that, the Republican Party is currently focused on demonstrating fiscal restraint, and rate increases designed to repay an approximately $20 billion deficit fit right into the current messaging.

I think that the following headline would have gotten the attention of people and politicians and possibly caused Congress to change its mind: “NFIP rates for homes to grow more than 20% a year!” However, that is only a true statement for non-primary residences located in AE and VE zones that were constructed before the first NFIP flood insurance rate map (FIRM) issued for the relevant region (so called “pre-FIRM” structures). A pretty small group of folks would be affected by this. Or perhaps a headline like: “25% annual rate increases by FEMA will apply to businesses!” But that is only a true statement for businesses located in AE and VE zones that were also constructed before the first NFIP flood insurance rate map issued for the relevant region. Again, a small group of folks to lobby Congress.