NFIP

NFIP, the National Flood Insurance Program, is a United States federal program established by the National Flood Insurance Act of 1968 to provide flood insurance to property owners, renters, and businesses in communities located in flood-prone areas. It is administered by the Federal Emergency Management Agency (FEMA), within the Department of Homeland Security since 2003.

Participation: The program makes federally backed flood insurance available through participating communities and private insurers that participate in the Write Your Own (WYO) program. In many cases, lenders require flood insurance for property located in Special Flood Hazard Areas (SFHAs) as a condition of mortgage.

Coverage and limits: NFIP policies provide two primary coverages: building and contents. Residential (one- to four-family dwellings) building coverage is available up to $250,000; contents up to $100,000. Nonresidential buildings can have building coverage up to $500,000 and contents up to $500,000. In addition to standard coverage, Increased Cost of Compliance (ICC) coverage is available up to $30,000 to help pay for costs to elevate, relocate, or flood-proof a structure to meet community requirements.

Maps and pricing: Premiums are risk-based and determined using FEMA's Flood Insurance Rate Maps (FIRMs). Some policyholders in well-managed communities can receive premium discounts through the Community Rating System (CRS).

Administration and history: NFIP's current structure includes the WYO program, under which private insurers issue NFIP policies and handle claims on behalf of FEMA. The program has evolved through reforms to gradually align premiums with flood risk and address the financial challenges posed by large flood events.