The National Flood Insurance Program

The National Flood Insurance Program (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.

Communities that participate in the NFIP agree to adopt and enforce floodplain management ordinances to reduce further flood damage. In exchange the NFIP makes federally backed flood insurance available to homeowners, renters and business owners in these communities. Communities must apply to the program for citizens to become eligible to buy flood insurance policies.

To get secured financing to buy, build, or improve structures in Special Flood Hazard Areas (SFHA) you will be required to purchase flood insurance. Lending institutions that are federally regulated or federally insured must determine if the structure is located in a SFHA and must provide written notice requiring flood insurance.

Flood insurance is available to any property owner located in a community participating in the NFIP. All areas are susceptible to flooding, although to varying degrees, in fact, 25% of all flood claims occur in the low-to-moderate risk areas. Flooding can be caused by heavy rains, melting snow, by inadequate drainage systems, failed protective devices such as levees and dams, as well as by tropical storms and hurricanes.

In 1968, Congress created the National Flood Insurance Program. The NFIP was broadened and modified with the passage of the Flood Disaster Protection Act if 1973 (http://www.fema.gov/pdf/nfip/floodact.pdf) and other legislative measures. It was further modified by the National Flood Insurance Reform Act of 1994 (http://www.fema.gov/pdf/nfip/riegle.pdf). The Mitigation Division, a component of the Federal Emergency Management Agency (FEMA), manages the NFIP and oversees the floodplain management and mapping components of the program.