5.3. National Flood Insurance Program

Communities across the country build their flood management capabilities by participating in the National Flood Insurance Program (NFIP). The NFIP supports flood risk reduction before and after disasters. It helps reduce the socioeconomic impact of floods. The NFIP allows property owners and renters in participating communities to purchase federal flood insurance policies to recover financial losses after a flood. To participate in the NFIP, communities adopt and enforce floodplain management policies to reduce the effects of flooding.

The NFIP is a key capability for plan participants. The local mitigation plan must describe how each community complies with the NFIP. For the most part, NFIP communities are local governments, excluding special districts. The local floodplain administrator is a key resource for understanding NFIP-related capabilities. If a jurisdiction does not participate in the NFIP, state this in the plan and explain why.

The NFIP touches all four types of capabilities:

• Planning and regulatory. Adopting floodplain management regulations and managing development in the floodplain is an NFIP requirement.
• Administrative and technical. Each community must designate a floodplain administrator. Other administrative and technical capabilities that support NFIP compliance may relate to permitting, zoning or site plan review.
• Financial. Having NFIP policies supports financial capabilities. Having NFIP policies in a community speeds recovery and allows post-disaster funds to be used elsewhere. Joining the NFIP gives communities access to other kinds of pre- and post-disaster funding for mitigation.
• Education and outreach. Education and outreach programs and tools through the NFIP may support flood risk communication and mitigation.

In addressing NFIP capabilities, the plan must include information on:

• NFIP participation.
• Adoption of NFIP minimum criteria in local regulations. Participants who have adopted higher standards should explain those standards.
• Adoption of the latest effective FIRM.
• Enforcement of local floodplain regulations to manage development in the floodplain.
• Staff capabilities to implement the NFIP and local floodplain regulations.
• How participating communities use the NFIP to reduce risk after a disaster through substantial damage and substantial improvement provisions.

Communities can decide how to present this information. Communities often include a table with NFIP information and narratives for more context.

Worksheet 5 is a tool to help participants understand their NFIP capabilities. It will also help identify actions to improve the existing program. The plan does not need to include specific actions in the mitigation strategy for NFIP compliance. However, it is a good idea to include such actions to improve community-wide resilience outcomes.

Communities apply to join the NFIP program, adopt a resolution of their intent to participate, and adopt and submit a FEMA-approved floodplain management ordinance. They also adopt the FIRM. Communities can participate in the NFIP even if they have no mapped special flood hazard areas or are minimally floodprone.

If a plan participant does not participate in the NFIP, the plan should also state that. Non-participating communities should include why they don’t participate, regardless of the reason.

Property owners and renters in nonparticipating communities cannot purchase or renew NFIP flood insurance. These community also faces other sanctions. The use of federal disaster assistance is restricted. Federal grants and loans for acquiring, repairing and constructing buildings in identified flood hazard areas are also limited. The NFIP Floodplain Management Requirements Study Guide and Desk Reference for Local Officials has more information on how the NFIP works.

First describe each participant’s NFIP status. This information is in the NFIP Community Status Book. For participating communities, include when the community joined the NFIP. Nonparticipating communities should explain why they do not participate. This may include why the community was suspended and any plans it has to re-enter the NFIP, if appropriate. In addition to basic participation information, the plan may list total flood insurance policies, premiums, coverage amounts and claims history. Include any repetitive loss properties.

Participating communities must adopt NFIP minimum floodplain management criteria through local regulation. They must also adopt the latest effective FIRM. These are important planning and regulatory capabilities because they support risk-aware development decisions in and around the floodplain.

The NFIP has national minimum criteria (see 44 CFR §60 Subpart A). Participants must adopt these minimum criteria. Many states require communities to adopt floodplain management regulations that exceed the national minimum. These are called higher standards. Communities can also elect to enforce higher standards to better manage their flood risk. The plan must say whether each participant has adopted the minimum NFIP floodplain management criteria and the latest FIRM. Note the effective FIRM date. The plan should also note if a community participates but has no identified special flood hazard areas. Participants who have adopted higher standards should explain those standards. If applicable, include activities that contributed to the community’s class ranking in the CRS.

Adopting floodplain management rules is only effective if the rules are followed and enforced. Each NFIP-participating community must describe how they comply with the NFIP requirements. This includes listing the agency or person responsible for implementing the NFIP in the community. This is usually the floodplain manager or administrator. The mitigation plan must do more than state that the community will continue to comply with the NFIP. It is important to explain how they will comply. Consider these questions when describing continued NFIP compliance:

• Who is the floodplain manager? Is this their primary or a secondary role? Does this person have adequate training and capacity for their role?
• Is the FIRM and FIS report in an accessible location? Does the community (or state) promote public access to floodplain information?
• How does the community support map change requests? These could be requests during the Risk MAP process or through Letters of Map Amendment or Revision.
• Does the community collect updated floodplain data or modeling? Is this shared with partners and with FEMA?
• How does the community issue development permits in the special flood hazard area? Who is responsible for permitting?
• How are floodplains regulated in new subdivisions?
• Does the community maintain elevation records? Does it track the number of buildings in the special flood hazard area?
• How does the community enforce its floodplain rules? Does enforcement include monitoring compliance and acting to correct violations?
• How does the community educate the public on floodplain management and the availability of flood insurance, in and out of the floodplain?

The floodplain manager is a key partner in understanding floodplain management enforcement and NFIP compliance. You may want to engage with your state NFIP Coordinator, too. This information may be found in the results of a recent Community Assistance Visit (CAV).

Suspended or withdrawn communities should describe the conditions of their suspension or withdrawal from the program. NFIP participation is a critical piece of the FEMA HMA grant program. Communities that do not participate in the NFIP risk losing access to important pre- and post-disaster grant programs.

The NFIP looks to reduce flood risk after a flood event. It does this through substantial damage/substantial improvement rules. These rules apply when a structure is more than 50% damaged or improved (by cost). The owner must build in a way that complies with current building codes and ordinances. This applies even if the structure was exempt from those rules before the damage or improvement. It also applies to damage from non-flood events like fire or wind. Substantial damage/substantial improvement allows communities to require owners of structures built before they joined the NFIP to comply with current standards. Communities are responsible for making substantial damage/substantial improvement determinations and notifying property owners.

The plan must describe how participants carry out the substantial improvement/substantial damage parts of their floodplain management regulations. This could include describing:

• Which agency or person makes substantial damage/substantial improvement determinations.
• Whether staff are trained to make substantial damage/substantial improvement determinations and if there are enough staff to complete them.
• The process the communities uses to make determinations.
• The community’s methods for communicating substantial damage/substantial improvement requirements before and after an event.

For more details, read FEMA 758: Substantial Improvement/Substantial Damage Desk Reference.