Consensus Report

Tying Flood Insurance to Flood Risk for Low-Lying Structures in the Floodplains (2015)

Topics: Water Hydrology

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One-fifth of the National Flood Insurance Program's 5.5 million policies cover structures that existed before floodplain maps became available. These older structures receive subsidized rates that are lower than warranted by their risk of flooding. However, most are low lying (negatively elevated)--that is, the elevation of the lowest floor is lower than the NFIP benchmark for construction standards and floodplain management ordinances. Low-lying structures are more likely to incur losses than structures built to the NFIP benchmark because they are inundated more frequently, and the depths and durations of inundation are greater.

The Biggert-Waters Flood Insurance Reform Act of 2012 and subsequent legislation require these subsidies to be phased out, which will result in substantial premium increases for low-lying structures. This report examines current National Flood Insurance Program methods for calculating risk-based rates for low-lying structures; identifies changes in analysis methods and data collection that are needed to support risk-based premiums; and discusses the feasibility, implementation, and cost of making these changes.