Are your part of the communities with NFIP?
In today's podcast, we discuss the differences between National Flood Insurance Program's (NFIP) participating communities and non-NFIP communities. What are the benefits of a participating community? How does it affect flood insurance rates? How will this affect you in the long run? What happens if your community doesn't participate with the NFIP?
NFIP Participating Community
Generally, these communities who came an agreement with the National Flood Insurance Program (NFIP) or Federal Emergency Management Agency (FEMA) that they'll do certain mitigation efforts in their local community and properties, in order to minimize or reduce the flood risks and other hazards that could occur and create disasters.
In exchange, they'd get funding from the federal government however they'll need to keep up with certain standards and expectations when floods do occur. For example, if a community determines that a home or business is damaged, a local official should explain the floodplain management ordinance provisions these properties should meet. Being a participating community obviously means that property owners will get access to the National Flood Insurance Program's (NFIP) flood insurance policies.
Another thing that you and your participating community will get access to is the CRS or Community Rating System. Basically, this is a discount program that ranges from five percent to forty percent. This percentage depends on how the NFIP will reward your community based on floodplain management activity that the community was able to cover. The more activities mean you're most likely to exceed the minimum standards of the NFIP thus more discount. This can be very helpful especially if you're in a high-risk area for flood or disasters since generally flood insurance premiums can be expensive and will get more expensive in the future.
Participating communities also get immediate access to disaster assistance, disaster grant, and Small Business Administration (SBA) loan. These will kick in with a presidential declaration to help the community out. So, you're seeing already a lot of good benefits for your communities participation with the NFIP.
Non-NFIP Participating Community
It's very self-explanatory, but this doesn't mean that these communities don't want to participate in the National Flood Insurance Program (NFIP). Although there are some communities who don't agree with the the NFIP's standards can be that the community was previously removed from participating or they don't have enough resources to keep up with the standards set by FEMA.
Basically flood insurance policies for homeowners who are in a non-participating community doesn't get access to all the benefits that the federal government provides to participating communities. This includes the government-backed NFIP flood insurance, disaster assistance, grants, and even SBA loan.
If your home or a commercial building you own was impacted by flood damage, I'll be the breaker of bad news, but not being a participating community means that the government won't be able to help you with these flood losses since you're most likely not legible for their insurance program. This doesn't mean that you are exempted from Flood Insurance Rate Map changes however. The federal government still has power to determine both the flood zones such as what becomes a special flood hazard area and base flood elevation levels.
You might ask, what do I do now since my community's not participating with the National Flood Insurance Program?
When in comes to flood insurance policies, your best option is through private flood. To briefly mention, flood insurance coverage from the private insurance companies can provide you up to $10,000,000 for the building or property and can provide replacement cost for the contents. Flood claims are also processed quicker compared to NFIP. You can always look back into our previous episode to check on the benefits of having flood insurance through the private market.
Although generally only 5% of communities are non-participants, meaning your county is participating with the NFIP however your local city isn't, it's still important to know where you and your community stands with the NFIP as each year there are significant increases in flood events and are more rampant.
If you're currently in a non-participating community, reach out to your current elected official, your community floodplain management, and ask them as to why you're not participating in the NFIP. Through this you can know what your community is doing since participating can help minimize not just the risk of flood, but also overall flood insurance premiums.
Remember, we have an educational background in flood mitigation. If you have any question about your current flood insurance, flood zone determination, or if you need flood protection assistance to better protect your home or business from this kind of disasters, please reach out to us by clicking the links below: