Fight Rising Flood Insurance Costs: Earning Insurance Discounts through Better Floodplain Management

In 2012 Congress passed the Biggert-Waters Flood Insurance Reform Act, which will require substantial increases to flood insurance rates in the National Flood Insurance Program (NFIP). In effect, the Federal Emergency Management Agency (FEMA) is required to phase out subsidies it has provided to certain flood-prone regions and set NFIP rates that reflect a property’s actual flood risk. The objective is to make the NFIP solvent and sustainable in the long term.

The timing and methodology for the phasing out of the subsidies is complex, but two key elements are the application of a new Flood Insurance Rate Map and new base flood elevations for many communities. Some of these maps have not been updated since the 1970s.

Congress is currently debating and offering amendments that may slow the implementation of the rate increases. However, there is a way for communities to be proactive and participate in a program that will provide discounts on NFIP premiums for residents and businesses.

The NFIP’s Community Rating System (CRS) is a voluntary incentive program that provides flood insurance premium discounts to residents in communities that demonstrate efforts to mitigate flood impacts and implement comprehensive floodplain management. Mark Pereira, PE, a Project Engineer with experience in flood planning and mitigation projects throughout the Northeast, notes that any municipality can participate. “Cities or towns are rated on a scale of 1 to 10. If you don’t participate, you’re rated a 10. Achieving a better rating depends on the level of floodplain measures a municipality has established.” Discounts range from a minimum of 5% to as much as 45%.

To earn the NFIP premium discounts, communities must submit a detailed application to FEMA that documents, among other items, the extent and nature of a municipality’s public outreach efforts on flood risks and regulatory actions designed to reduce future property damage from flooding.

“Most communities have already implemented and adopted items necessary for discounts in their local stormwater, zoning, and building ordinances,” says Woodard & Curran’s Jeff Stearns, PE, who has over 17 years of experience on flood planning projects.

“It’s not just about saving money on insurance rates,” adds Stearns. “The CRS program encourages communities to create an awareness of flooding in a community and demonstrates a level of concern for resident safety.”

The time to begin planning is now, before rates increase substantially, explains Pereira. “As residents become aware of this program, they will encourage local government to become involved.” For more information, contact Jeff Stearns, PE, or Mark Periera, PE.


David White National Practice Leader Flood Mitigation

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