The National Flood Insurance Program, FEMA, and You

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Damage sustained by a town in Fairfield county after Hurricane Sandy.  Image courtesy of Michael McAndrews, a photgrapher for the The Courant“.

Along the coasts and rivers of the US, millions of Americans are enrolled in a flood insurance plan offered by the federal government. Through the Federal Emergency Management Agency (FEMA), many, if not most of these homeowners are getting rates close to half of what a private insurer could offer given their risk. However, since the latest string of hurricanes and storms, the government has paid out huge sums of money, enough to put FEMA over $24 billion in debt.

In an effort to make the National Flood Insurance program more sustainable, Congress passed the Biggert-Waters Flood Insurance Reform Act in 2012, allowing FEMA to charge more realistic rates. In 2013, FEMA began phasing in these higher premiums. Few could have prepared for just how high the premiums were going to be. Senators and Congressmen across the country reported that many homeowners were unsure of how they could support these hikes in premiums, which sometimes involved an increase of more than ten-fold.

Part of the outrage is directed at FEMA’s expansion of flood zone coverage. Homeowners who had intentionally built or bought homes outside of flood zones are now finding themselves with a flood-prone risk profile. Prior to the Flood Insurance Reform Act, if a homeowner’s risk profile changed due to a remapping of flood zones, the old rate could be “grandfathered” in. The new law has ended this practice, and the result has been shocking for homeowners and business owners alike, most of whom were first contacted by their banks to inform them of their new flood risk. (If you were recently mapped into a flood zone, FEMA has developed a new policy that can provide temporary relief from premium hikes.)

However, it’s not just home and business owners bearing all the surprise. Developers and contractors have also been caught off-guard by these changes. Despite usually being in the know about these issues, many built homes and buildings based on the outdated flood zone mapping. Now, their buildings carry a flood risk despite their best efforts to avoid such risk. For them, it’s a matter of whether they’ll be able to sell their at-risk investments in a housing market that has yet to fully recover.

More recently, Congress has drafted a bill that would delay the premium hikes of the Flood Insurance Reform Act. A two year study would be conducted by the National Academy of Sciences. Once completed, Congress would spend a year reviewing the study, and then make these challenging policy decisions with a more informed idea of how much it will cost home and business owners. This would push the eventual rise in premiums to 2018 or until the study is completed and reviewed. The Senate is set to vote on the bill sometime this month (January, 2014).


Regardless of whether hikes in flood insurance rates are delayed or not, eventual increases are an inevitability. Below we have compiled a list of resources that can help you decide what to do next if you face higher flood insurance premiums, or suspect you are at risk. For general information about flood insurance, you can refer to an older blog-post here.

  • Here is a fact sheet provided by FEMA that explains how your flood risk is assessed.

  • Here you will find a slide-show in PDF format that discusses the National Flood Insurance Program and Biggert-Waters Flood Insurance Reform Act in depth, courtesy of William Nechamen of the New York State Department of Environmental Conservation (2012). It will familiarize you with flood insurance terminology and the standards that determine flood insurance policy rates.

  • Here is a general Q&A provided by FEMA about the National Flood Insurance Program Reform. (All FEMA-related resources can be found at

  • Here is a short brochure created by FEMA (Oct. 2007) which shows some of the

    ways in which flood insurance rates can be greatly reduced with retrofits and home renovations. Similar information provided by FEMA can be found here.

  • Here is a more detailed and comprehensive PDF guide for reducing flood risk and flood insurance premiums for existing residential buildings (June 2013).


Elevation Certificates are a tool used by insurance agencies to accurately assess your Base Flood Elevation (BFE). It can also ensure that your premium accurately reflects your risk.

If you need an Elevation Certificate, have general questions about certification, or would like to know how much it could cost, please consider requesting a free quote.