National Flood Insurance Program (NFIP) Residential structures requirements Nonresidential structures requirements Proportion of NFIP purchasers in Florida

The National Flood Insurance Act of 1968 created the Federal Insurance Administration and made flood insurance available for the first time. The Act also led to the creation of the National Flood Insurance Program, whose goals were to provide flood insurance for structures and their contents that are located in communities with minimal floodplain management standards and to establish insurance rates for structures located in identified flood hazard areas.

The Flood Disaster Protection Act of 1973 amended the NFIP by making the purchase of flood insurance mandatory for the protection of property located in Special Flood Hazard Areas.

National Flood Insurance Program (NFIP)

Qualifying for NFIP. The Federal Emergency Management Agency (FEMA) administers the NFIP and has established requirements communities must meet to participate in the program. The communities must agree to adopt and enforce regulations that reduce flood risks. Homeowners, renters, and business owners may obtain flood loss insurance through insurance agencies if the subject property is located in a community that participates in the program.

NFIP criteria for “Special Flood Hazard Areas” (SFHA).   FEMA has identified flood zones throughout the U.S. and shows those areas on their Flood Insurance Rate Maps (FIRM), including the categories of flood risk for each area: low-risk, moderate-risk, and high-risk.

Any high-risk area is also identified as a special flood hazard area, which is defined as an area with a 1% chance of flooding in any year. That does not mean the area will flood every year; rather, it means there is a 1% statistical possibility of flooding every year. The 1% annual chance flood is also referred to as the base flood or 100-year flood. This is of special interest to mortgage lenders because that means there is a 1 in 4 chance of flooding during a 30-year mortgage. Thus, mortgage lenders holding loans on property located in a SFHA typically require the homeowner to carry flood insurance on the property.

SFHAs are identified as either A zones (SFHA floodplain areas) or V zones (SFHA coastal land area).

Development within SFHAs restrictions.  Before beginning development within a SFHA, a developer must obtain a permit to ensure the project will meet the NFIP requirements and local community ordinances. Requirements vary based on the actual zone where the property is located and the type of structure being built.

Because V zones have higher flood risks, structures in those areas must be anchored to withstand the force of waves, high winds, and erosion and to prevent collapse and/or movement. Development sites are to be graded to prevent waterflow from entering into ground floor structures. Structures built on slopes must have drainage paths to guide waterflow away from the structures.

Development within SFHAs must not obstruct the natural flow of flood waters. For example, removing sand from beaches removes the natural barrier built up over years and exposes inland areas to increased flood risks. These standards protect residents and property from flooding, and they preserve floodplains as a natural means of flood control.

Residential structures requirements

Residential structures in the SFHA’s V zone must have the lowest floor above the “Base Flood Elevation” or have an open foundation (often referred to as pilings or stilts) to allow water flooding the area to flow under the structure without causing damage.

Nonresidential structures requirements

Nonresidential structures in the SFHA’s V zone must have the lowest floor above the Base Flood Elevation, be water-tight below the Base Flood Elevation, or have an open foundation.

Proportion of NFIP purchasers in Florida

It has been estimated that approximately 15% of American homeowners have flood insurance policies. However, due to hurricane-related flooding in recent years, approximately 35–40% of those policyholders are Floridians. Even Texas, South Carolina, and Louisiana, who are also flood prone, do not come close to that number of policyholders.