Researchers 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.