The National Flood Insurance Program (NFIP) enables property owners in participating communities to purchase flood insurance as protection against flood losses. To help ensure that protection, state and local governments enforce floodplain management regulations that reduce future flood damages.
Flood insurance premiums for residents and business owners in high-risk areas can be reduced substantially if communities build higher and actively participate in the Community Rating System (CRS).
Communities incorporate NFIP requirements into their zoning codes, subdivision ordinances, and/or building codes or adopt special purpose floodplain management ordinances. The NFIP requirements apply to areas mapped as Special Flood Hazard Areas (SFHA) on Flood Insurance Rate Maps (FIRMs) issued by FEMA. The SFHA is the area that would be flooded by the "base flood" (defined as the flood that has a 1 percent chance of occurring in any given year; also known as the "100-year flood").
The NFIP requirements include:
- Elevation of new and substantially improved residential structures above the base flood level.
- Elevation or dry floodproofing (made watertight) of new or substantially improved non-residential structures.
- Prohibition of development in floodways, the central portion of a riverine floodplain needed to carry deeper and faster moving water.
- Additional requirements to protect buildings in coastal areas from the impacts of waves, high velocity, and storm surge.
These requirements are the most cost-effective way to reduce the flood risk to new buildings and infrastructure.
Structures built to NFIP standards experience 80 percent less damage than structures not built to these standards and have resulted in $1.2 billion per year in reduced flood losses.
In addition to protecting new buildings, the NFIP substantial improvement and substantial damage requirement ensures that flood protection measures are integrated in structures built before FIRMs were developed. A building is considered substantially improved or substantially damaged when the cost of improving or repairing the building equals or exceeds 50 percent of the market value of the building. When this occurs, the community, which makes the determination, must ensure that the NFIP requirements are applied to these building so that they are protected from future flood damages.