FEMA 101: National Flood Insurance Program

If your residence or business is in a flood prone area, this article provides an update to the new National Flood Insurance Program (NFIP) Program.

The National Flood Insurance Program (NFIP) provides coverage against flood damage and can ensure that a flood doesn’t bring financial ruin. Flooding can happen at any time in virtually any location and unlike other natural hazards, flood damage is not covered by a homeowners insurance policy. While certain areas may be more prone to flooding – especially those in coastal areas or riverine environments – history has shown that almost no place is immune. Since standard homeowners insurance does not cover flooding, it is important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact the United States.

Congress created the NFIP in 1968 to help provide a means for property owners to financially protect themselves. It is a self-supported program that is not funded by tax revenue. 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. Currently, there are more than 5.5 million policy holders and 21,000 participating communities which agree to enforce minimum flood plain standards, flood maps and other ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

Typically, NFIP policies have a 30-day waiting period prior to the policy going into effect. Therefore, the policy should not be purchased only if flooding appears imminent but rather it should be viewed as protection against a continuing threat. On average, the flood insurance premium nationwide is about $700 a year, which is less than $2 a day for financial protection from what could be devastating effects of a flood to one’s home or business.

In March 2014, the Homeowner Flood Insurance Affordability Act was signed into law. More information about flood insurance reform can be found at www.fema.gov/flood-insurance-reform. FEMA will continue to provide updates about the changes as they become available.

For more information about flood damage risks and flood insurance, visit www.floodsmart.gov or call 1-800-427-2419 to find an agent in your area.