Chapter 1: The National Flood Insurance Program
The National Flood Insurance Program (NFIP) was created by Congress in 1968, offering nonstructural approaches to reduce flood damage (see ). The program's purpose is to make low-cost flood insurance available to property owners in flood-prone communities in return for each community agreeing to guide future floodplain development. The NFIP requires local governments to adopt and enforce floodplain regulations before flood insurance can be obtained in their community. The local regulations must meet the minimum NFIP requirements established by state and federal government.
Congress created the program to address the problem of increasing annual losses. For decades, the federal response to food disasters was limited to building flood control works and providing disaster relief to flood victims. The NFIP works on the basis of an agreement between the federal government and flood-prone communities that choose to participate in the program.
EMERGENCY PROGRAM OF THE NFIP
REGULAR PROGRAM OF THE NFIP
A-Zones are found on all Flood Hazard Boundary Maps (FHBMs) and Flood Insurance Rate Maps (FIRMs). An A-Zone is an area that would be flooded by the Base Flood, and is the same as a SFHA or a 100-year floodplain. These areas may be numbered as A1 to A30, or as A99, or they may be unnumbered as A, AE, AH or AO Zones. Numbered A-Zones indicate an area's risk to flooding.
The Base Flood is referred to as the 100-year flood and is a measure of flood magnitude based on probability. The Base Flood has a one percent chance of occurring or being equaled or exceeded in any given year.
BASE FLOOD ELEVATION (BFE)
The height of floodwater reached during the Base Flood is referred to as the Base Flood Elevation or 100-year flood elevation. The elevation of the water surface is referenced to the National Geodetic Vertical Datum (NGVD) of 1929. In other words, a Base Flood Elevation of 898 feet (NGVD) refers to a water surface elevation of 898 feet above NGVD (other datums may be used and will be specified on the maps). See for cross-sectional views of the 100-year floodplain.
For purposes of the NFIP, development means any man-made change to improved or unimproved real estate, including, but not limited to, buildings or other structures, filling, mining, dredging, grading, paving, excavation or drilling operations, or storage or equipment/materials.
Construction, placement of fill or similar alteration of topography in the floodplain that reduces the area available to convey floodwaters.
EXISTING MANUFACTURED HOME PARK OR SUBDIVISION
Means a manufactured home park or subdivision for which the construction of facilities for servicing the lots on which the manufactured homes are to be affixed (including, at a minimum, the installation of utilities, the construction of streets and either final site grading or the pouring of concrete pads) is completed before the effective date of the floodplain management regulations adopted by a community.
EXPANSION TO AN EXISTING MANUFACTURED HOME PARK OR SUBDIVISION
Means the preparation of additional sites by the construction of facilities for serving the lots on which the manufactured homes are to be affixed (including, at a minimum, the installation of utilities, the construction of streets and either final site grading or the pouring of concrete pads).
FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA)
The federal agency with overall responsibility for the administration of the NFIP. It is part of the U.S. Department of Homeland Security.
FLOOD BOUNDARY FLOODWAY MAP (FBFM)
A floodplain management map issued by FEMA that depicts, based on detailed analyses, the boundaries of the 100-year and 500-year floods and the 100-year floodway.
This term refers to a flood probability of a certain magnitude being equaled or exceeded in a given year. For example, a 100-year flood has the probability of a one percent chance of reaching or exceeding a certain elevation in any given year. It must be noted that flood frequency is a probability. Thus, it is possible for a 100-year flood to occur three years in a row, or not at all for 500 years.
FLOOD HAZARD BOUNDRY MAP (FHBM)
An official map of a community, issued by the Administrator, where the boundaries of the flood, mudslide, i.e., mudflow and related erosion areas having special hazards have been designated as Zones A, M, and/or E.
FLOOD INSURANCE RATE MAP (FIRM)
An official map of a community, on which the Federal Emergency Management Agency has delineated both the areas of special flood hazards and the risk premium zones applicable to the community (see ).
FLOOD INSURANCE STUDY (FIS)
The FIS is the official report prepared by FEMA that is an explanation, evaluation and determination of flood hazards with corresponding water surface elevations, flood profiles and maps for floodplain regulation purposes.
A flood profile is a graph that shows the relationship of the water surface elevation of a flood event to locations along a river or a stream. Flood profiles are explained in more detail in .
Zones on the Flood Insurance Rate Map (FIRM) in which the risk premium insurance rates have been established by a Flood Insurance Study.
A general and temporary condition of partial or complete inundation of normally dry land areas caused by (1) the overflow of waters, or (2) the unusual and rapid accumulation of runoff of surface waters from any source.
The area inundated by the 1% chance flood constitutes the 100-year floodplain of a river, creek, ditch, lake or other source of flooding. This floodplain is also referred to as the Special Flood Hazard Area (SFHA). It is the area of a community where development must be regulated through a local ordinance conforming to the standards of the NFIP.
The operation of an overall program of corrective and preventive measures for reducing flood damage, including but not limited to emergency preparedness plans, flood control works, and floodplain management regulations.
FLOODPLAIN MANAGEMENT REGULATIONS
Zoning ordinances, subdivision regulations, building codes, health regulations, special purpose ordinances (such as a floodplain ordinance, grading ordinance, and erosion control ordinance) and other applications of police power. The term describes such state or local regulations, in any combination thereof, which provide standards for the purpose of flood damage prevention and reduction.
Designing a structure in a manner that reduces or eliminates flood damage.
The river channel plus any adjacent floodplain areas that are needed to carry the waters of the base flood without substantial increases in the flood height. NFIP regulations limit this increase to a maximum of one foot, also known as a surcharge (see and ).
Area in the 100-year floodplain outside of the floodway. It is the area of the floodplain that can be developed without causing a substantial increase (more than one foot) in the base flood elevation.
Any structure that is:
LOWEST ADJACENT GRADE ELEVATION
The lowest natural elevation of the ground surface prior to construction next to the proposed walls of a structure.
LOWEST FLOOR ELEVATION
The elevation of the lowest enclosed area (including basement). An unfinished or flood resistant enclosure, usable solely for parking of vehicles, building access or storage in an area other than a basement area, which is not considered a building's lowest floor, provided that such enclosure is not built so as to render the structure in violation of the applicable non-elevation design requirements of 60.3 of the NFIP regulations.
A structure, transportable in one or more sections, which is built on a permanent chassis and is designed for use with or without a permanent foundation when connected to the required utilities. For floodplain management purposes, the term “manufactured home” also includes park trailers, travel trailers and other similar vehicles placed on a site longer than 180 consecutive days.
New construction means, for the purposes of determining insurance rates, structures for which the “start of construction” commenced on or after the effective date of an initial FIRM or after December 31, 1974, whichever is later, and includes any subsequent improvements to such structures. For floodplain management purposes, “new construction” means structures for which the “start of construction” commenced on or after the effective date of a floodplain management regulation adopted by a community and includes any subsequent improvements to such structures.
NEW MANUFACTURED HOME PARK OR SUBDIVISION
A manufactured home park or subdivision for which the construction of facilities for servicing the lots on which the manufactured homes are to be affixed (including at a minimum, the installation of utilities, the construction of streets, and either final site grading or the pouring of concrete pads) is completed on or after the effective date of the floodplain management regulations adopted by a community.
A vehicle that is (1) built on a single chassis, (2) 400 square feet or less when measured at the largest horizontal projections, (3) designed to be self-propelled or permanently towable by a light duty truck, and (4) designed primarily as temporary living quarters for recreational, camping, travel or seasonal use.
SPECIAL FLOOD HAZARD AREA (SFHA)
The land in the floodplain within a community subject to a one percent or greater chance of flooding in any given year. A SFHA is the same as an A-Zone.
START OF CONSTRUCTION
The date the building permit was issued, provided the actual start of construction, repair, reconstruction, rehabilitation, addition, placement or other improvement was within 180 days of the permit date. The actual start means either the first placement of permanent construction of a structure on a site, such as the pouring of slab or footings; any work beyond the stage of excavation; or the placement of a manufactured home on a foundation. Permanent construction does not include land preparation, such as clearing, grading, and filling; the installation of streets or walkways; excavation for a basement; footings, foundations or the erection of temporary forms; or the installation of accessory buildings on the property, such as garages or sheds not occupied as dwelling units and not part of the main structure. For a substantial improvement, the actual start of construction means the first alteration of any wall, ceiling, floor or other structural part of a building, whether or not that alteration affects the external dimensions of the building.
For floodplain management purposes, a structure is described as a walled and roofed building or manufactured home, including gas or liquid storage tank that is principally above ground.
Any damage sustained by a structure whereby the cost of restoring the structure to its original condition would be equal or exceed 50 percent of the market value of the structure before the damage occurred.
Any reconstruction, rehabilitation, addition or improvement of a structure, the cost of which equals or exceeds 50 percent of the market value of the structure before the start of construction of repair work performed. The term does not include:
A grant of relief by a community from the terms of a floodplain management regulation.
The failure of a structure or other development to be fully compliant with the community's floodplain management regulations.
The NFIP definitions can also be found in 44 CFR §59.1 and referenced in 44 CFR §59.21-30.
BASIC COMMUNITY PROGRAM ELEMENTS
The responsibility communities incur when participating in the National Flood Insurance Program is to regulate development in the floodplain. If floodplain development is not regulated, the availability of flood insurance will be jeopardized. Flood insurance facts are listed in and .
To meet this responsibility, cities and counties must adopt and enforce a floodplain ordinance that meets the requirements of the NFIP. The minimum standards the local government must adopt depend on the amount of data Federal Emergency Management Agency has supplied the community-the more detailed the data, the more stringent the regulations required. Data for communities is in one of the four following categories:
These data are determined for the community in the original two phases of the NFIP; the Emergency and Regular Phases.
THE EMERGENCY PHASE
The Emergency Phase is the temporary phase of the NFIP with minimum flood insurance available. In this phase, FEMA provides the community with a Flood Hazard Boundary Map that identifies those general areas in the community that may be flooded in the event of the Base Flood. These areas are marked as Zone A.
The community is the required to ensure that new development in the Zone A areas will be protected from the Base Flood and will not increase the flood hazard to other areas.
In certain cases FEMA has not identified flood hazard areas, but the local government has indicated that flood hazards exist by participating in the NFIP. Since FEMA did not provide the community detailed flood hazard information in the Emergency Phase of the NFIP, it was the obligation of the local government to use any available information source to implement its ordinance.
In either case, the local government must adopt and enforce an ordinance that establishes a permit system for development that requires new construction to be safe from flooding if it is located in the flood-prone area.
THE REGULAR PHASE
A community usually becomes eligible to participate in the Regular Phase of the NFIP when FEMA completes a detailed Flood Insurance Study. This study identifies the community's flood hazard area based on hydrologic (amount of water and frequency of flood events) and hydraulic (the floodplain's capacity to carry floodwaters) analyses. This study defines the limits of the floodplain and divides it into flood zones reflecting the risk of flooding. These zones, along with Base Flood Elevations, are indicated on a Flood Insurance Rate Map, or FIRM. (See "Flood Zones" under definitions.)
FEMA may also provide a community with detailed information to designate a regulatory floodway. This information, in the past, was displayed on a Flood Boundary Floodway Map (FBFM). The information found on this map is referenced to the Flood Insurance Study. However, due to a change to a single map system, floodways will now be shown on the new generation FIRMS. Only new studies or complete study revisions will see the one-map system.
Communities participating in the Regular Phase of the NFIP must adopt and enforce an ordinance that requires new structures in flood hazard areas to have the lowest floor, including the basement, elevated to or above the Base Flood Elevation. The ordinance must also limit development in the floodway to passive uses-such as agriculture open space-which will not increase the height of the base flood. Floodway development is permitted if a zero rise can be certified. Communities are encouraged to adopt more stringent standards to restrict floodway development. This is explained more in the No Adverse Impact Chapter.
Communities participating in the NFIP agree to return a Biennial Report on floodplain activities to FEMA. Every two years FEMA sends a form to the community floodplain administrators requesting information concerning any changes to the community's flood hazard area, development activities that have taken place in the floodplain, and verification of the number of floodplain residents and structures. The Biennial Report should be completed and returned within 30 days. Any information that is not accurate should be corrected on the form. FEMA is in the process of revising the Biennial Report Forms at the time of this guidebook printing.
COMMUNITY ASSISTANCE VISIT (CAV)
FEMA and the OWRB conduct Community Assistance Visits (CAVs) in participating communities to evaluate progress and efforts to comply with the regulations of the NFIP. The primary purpose of CAVs is to identify and help communities solve floodplain management problems.
A CAV is the foundation of FEMA's Community Compliance Program, which outlines procedures for enforcement activities by FEMA under the NFIP. CAVs, performed by FEMA, the Oklahoma Water Resources Board (OWRB), or government contractor, monitor community floodplain management efforts necessary as a condition of community participation in the NFIP. A CAV is the most comprehensive form of FEMA community contact with a floodplain tour and inspection of the floodplain development permit records. Biennial Report information is verified at this time and the community's floodplain management program is evaluated. Any shortcoming FEMA sees in the community's floodplain management program is identified and corrective actions are taken by the community. Enforcement action can be initiated by FEMA for community noncompliance with their own floodplain ordinance, which is based upon NFIP regulations. When noncompliance is cited, FEMA expects the community to identify and take actions necessary to remedy these infractions. Penalties for noncompliance are outlined under "Enforcement" in Chapter 5. The Community Assistance Contact (CAC) is similar to a CAV except with much less detail. The CAC can be a personal visit or just a telephone call.
One of the main reasons communities join the NFIP is to make affordable insurance available to their residents who want to financially protect themselves from flood hazards. Federally guaranteed flood insurance is made available in communities that agree to regulate development in their mapped floodplains. When a community joins the NFIP and remains compliant with provisions of the program, ANY property in that community, whether in or out of a mapped floodplain, is eligible for flood insurance coverage. Property owners should work through their insurance agents to buy the policy and settle claims - the State Floodplain Administrator or FEMA should not be included. Coverage is basically provided for insurable buildings and their contents.
As of December 2003, flood insurance coverage is as follows:
INCREASED COST OF COMPLIANCE (ICC) COVERAGE
On June 1, 1997, the National Flood Insurance Program (NFIP) modified the Standard Flood Insurance Policy to include coverage that will help reduce the financial burden to elevate, flood proof, demolish or relocate flood damaged homes to bring them into compliance with the community's floodplain management ordinance.
Increased Cost of Compliance (ICC) coverage under the NFIP provides for the payment of a claim to help cover the cost to comply with the community floodplain management ordinance after a flood event in which a building has been declared substantially damaged or repetitively damaged (see and ). When an insured building is damaged by a flood and the community declares the building to be substantially damaged or repetitively damaged, ICC will help pay for the cost to elevate, flood proof, demolish or relocate the building up to a maximum benefit of $30,000 as of January 2004. (Check the FEMA website for the most current ICC benefit amount.)
In terms of ICC coverage, a repetitive loss structure is any structure covered by a flood insurance policy that has incurred flood related damages on two occasions during a ten year period ending on the date of the event for which the second claim is made, in which the cost of repairing the flood damage, on the average, equals or exceeds 25% of the market value of the structure at the time of each such flood event.
A structure is considered to be substantially damaged when the damage of any origin is sustained by a structure whereby the cost of restoring to its before damaged condition would equal or exceed 50% of the market value of the structure before the damage occurred.
ICC coverage is in addition to the building coverage for the repair of actual physical damages from a flood under the Standard Flood Insurance Policy (SFIP). Regular program policies with building coverage under the SFIP issued or renewed on or after June 1, 1997, will include ICC coverage, except buildings insured under the Group Flood Insurance Policy or insured under the Condominium Unit Owner Policy. Buildings located in emergency NFIP Communities are EXCLUDED from ICC coverage. Standard Flood Insurance Policies will increase from $4.00 to $75.00 per policy depending on their flood risk zone and amount of coverage.
The maximum limit of $30,000 under ICC will help property owners insured under the NFIP pay for a portion or, in some cases, all of the costs of undertaking actions to protect homes and businesses through elevation, floodproofing, demolition or relocation of an insured building. The ICC claim payment must be used toward costs of undertaking any of the above mentioned mitigation measures.
ICC claim payments will be made whether or not there is a Presidential Declaration. In order for flood-damaged structures to be eligible for ICC, the structures must either be a repetitive loss structure or substantially damaged structure. In addition, the community must have a cumulative substantial damage and/or repetitive loss provision in the community's floodplain management law or ordinance already enforced against all structures community.
If flood insurance policyholders have questions on ICC, please refer them to their insurance company, agent, or the FEMA Website.
RIEGLE ACT: MANDATORY PURCHASE REQUIREMENT
Title V of the Riegle Community Development and Regulatory Improvement Act of 1994 (Reform Act) substantially amended the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973. The Reform Act strengthened the mandatory purchase provisions that originated with the Flood Disaster Protection Act of 1973. Specifically, the Reform Act imposed significant new obligations on lenders and their servicers. The mandatory flood insurance purchase requirement, as specified under the Reform Act, applies to all forms of federal or federally related financial assistance for buildings located in the floodplain. It also applies to disaster assistance and all mortgage loans purchased by Fannie Mae or Freddie Mac in the secondary mortgage market.
Before a person can receive a loan or other financial assistance, the lender must verify the location of the building in the base floodplain by using a Flood Insurance Rate Map (FIRM). The lender has a responsibility to use the FIRM even with community-provided assistance and information concerning the flood zone status of the property. If the building is in a floodplain, the agency or lender is bound by law to require the recipient to purchase a flood insurance policy on the building. While not mandated by law, a lender may require a flood insurance policy as a condition of a loan for a property in any location.
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Page last updated: February 18, 2015