National Flood Insurance

Topics: Insurance, National Flood Insurance Program, Risk Pages: 4 (1715 words) Published: November 13, 2008
Over 5 million people spread across 20,200 communities hold a flood insurance plan. In the year 2005 the National Flood Insurance Plan (NFIP) had paid out close to 16 billion. The premiums paid by the 5 million have only surmounted to 2 billion, therefore the NFIP has the ability to reach out to the US Treasury. With the US Treasury enabling the NFIP to meet its financial obligations, the financial obligations are becoming the obligation of the taxpayers (GAO, 2005) (Wells, 2005). The goals of the NFIP are “to provide property flood insurance coverage for a high proportion of property owners who would benefit from such coverage, through this insurance coverage reducing taxpayer funded disaster assistance when flooding strikes and reducing flood damage through flood plain management and the enforcement of building standards (such as elevating structures)” (GAO, 2005).

A community must reach out to FEMA, and FEMA authorizes the sale of flood insurance, based on an emergency status, or regular status. It is up to FEMA to assess the degree of flood risk and developmental potential (Fegan & Olexa, 1998). FEMA is obligated to provide accurate flood maps. Today, FEMA is able to create a more accurate flood map than the maps that were available during the inception of NFIP. Today’s flood maps are digital, therefore more accurate and more accessible. These maps are underlining where the risk occurs in a community. These maps reduce the flood risk within the floodplains by allowing the community to effectively regulate development through zoning and building standards. These digitized maps are now available on the internet, allowing more people access to these maps. Homeowners will be able to easily identify if they should be taking part in the NFIP. These maps will also be useful in the mitigation and risk analysis of the areas (GAO, 2005). FEMA is responsible for ensuring that the flood zone take part in a Flood Insurance Study (FIS). “The purpose of the...

References: Federal Emergency Management Agency (FEMA). (2002, August 1). National Flood Insurance Program - Program Description. Retrieved June 18, 2007 from
Fegan, R. & Olexa, M. (1998). The Disaster Handbook: How the National Flood Insurance Program (NFIP) works. Retrieved June 18, 2007 from (2005, September 20). NFIP announces simplified adjustment process. Retrieved June 19, 2007 from;jsessionid=C29193FD2E99B14FD6368F9A8FF77F09 (n.d.). What are the benefits of flood insurance? Retrieved June 19, 2007 from
Insurance Journal. (2007, June 14). Flood Insurance Program doesn’t know if payments covered wind damage. Retrieved June 19, 2007 from
Reilly, S. (2007, May 15). Press-Register: Study pushes insurance catastrophe fund plan. Retrieved June 19, 2007 from
U.S. Government Accountability Office (GAO). (2005, October 18). Statement of William O. Jenkins, Jr., Director, Homeland Security and Justice Issues. Challenges facing the National Flood Insurance Program. Retrieved June 18, 2007 from
Wells, B. (2005, December 19). Insurance Journal: Historic hurricane year puts the spotlight on Federal Flood Insurance. Retrieved June 18, 2007 from
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