Towns Not in Flood Insurance Program Will Get Another Chance

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Release date: 
September 22, 2011
Release Number: 
4022-030

BURLINGTON, Vt. -- Some Vermont municipalities that didn't join or failed to comply with provisions of the National Flood Insurance Program -- potentially making their residents ineligible for some disaster assistance -- will be getting a second chance.

Officials with the Federal Emergency Management Agency said that some 39 Vermont communities who are listed as "sanctioned" will be given until March 1, 2012, to apply for entrance into the NFIP.

If accepted, the owners of properties located in the floodplain that were damaged by Tropical Storm Irene would become eligible to apply for FEMA disaster assistance grants.

"Sanctioned communities need only submit a 'resolution of intent' to apply for NFIP participation and residents of the community can register for FEMA assistance," said FEMA's Federal Coordinating Officer, Craig Gilbert.

The National Flood Insurance Program offers federally-backed flood insurance to property owners and renters in communities that participate in the program, as well as increased state disaster assistance and access to federal mitigation grants that can be used to help prevent future damage.

In exchange, those municipalities agree to adopt and enforce floodplain management ordinances that set standards for building or repairing structures in the floodplain to reduce the risk of damage from flooding in the future.

Cities or towns that do not join the NFIP after having flood-prone areas identified, or that fail to adopt and enforce floodplain management ordinances, are considered sanctioned. Buildings in those sanctioned communities that could have been insured by the NFIP are not eligible for FEMA grants to repair or rebuild them.

Other penalties for sanctioned communities include:

  • Property owners, or renters, will not be able to purchase a NFIP flood insurance policy, and existing policies will not be renewed.
  • Federal grants or loans for development will not be available in identified flood hazard areas under programs administered by Federal agencies such as the Department of Housing and Urban Development, Environmental Protection Agency, and Small Business Administration.
  • Federal mortgage insurance or loan guarantees, such as those written by the Federal Housing Administration and the Department of Veteran Affairs, will not be provided in identified flood-hazard areas.
  • Rental Assistance will be provided in sanctioned communities, but only to those renters who do not reside in a flood-prone area.

At this time, FEMA is not delaying processing Individual Assistance applications from residents of sanctioned communities.

Nearly 21,000 communities participate in the NFIP nationwide. As of this year, some 231 Vermont towns and cities were participating in the program, which is administered by FEMA but whose policies are sold through private insurance agents throughout Vermont.

More than 25 percent of claims paid are from areas at medium or low risk of flooding. In these areas, NFIP flood insurance can be purchased for as little as $129 a year for a building and its contents or $49 for contents only.

Homes can be insured against flood damage for up to $250,000 and commercial buildings insured for up to $500,000. Policies can be written to include contents coverage up to $100,000 for homes and $500,000 for business owners' contents. Renters can insure their personal property for up to $100,000.

The average homeowner pays about $600 a year for flood insurance, which pays claims even if a disaster is not declared by the president. Less than half of the floods in the U.S. result in a federal disaster declaration.

Since 1973, the NFIP has paid nearly $40 billion dollars in flood insurance claims, helping hundreds of thousands of families and businesses recover from flood events.

Due to the 30-day waiting period, NFIP policies beco...

Last Updated: 
July 16, 2012 - 18:46
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