Flood Insurance is a Public-Private Partnership

Federal, State, and Local Governments, Lenders, Insurers Citizens

Jun 23, 2009

Flood insurance is only available because of government action, but making the NFIP work requires private help as well. Insurance companies have big role.

The Federal government instituted the National Flood Insurance Program (NFIP), and is the nationwide-administer of it. They are responsible for making sure regulations enacted in response to Federal laws remain up to date. They publish flood insurance studies and flood maps for all communities that participate in the NFIP.

They change the flood maps as needed based on changing conditions. They provide enforcement assistant to local communities. And they conduct much training of flood plain administrators, engineers, and surveyors as well as education for citizens.

FEMA’s Role

Many people erroneously believe the US Army Corps of Engineers has responsibility for flood plain regulations and enforcement. That was true at one time. FEMA has taken over that role, however, and the COE now has limited involvement with flood plains. Two areas they still participate in are:

Local and State Government’s Role

The primary enforcer of flood plain regulations is the local community: city, township, county, or occasionally an inter-local government consortium. The community appoints a flood plain administrator and enacts certain regulations designed to reduce or eliminate damage from flooding. The local administrator receives training from FEMA and eventually certification.

The community makes sure flood maps are available for inspection by citizens, and helps to guide citizens, developers, and engineers through the process of development in flood prone areas. Federal regulations recognize that a complete ban on development in flood prone areas is not possible. So regulations are designed to be protective of life and property, direct development away from flood plains as much as possible, and provide for orderly development within the flood plain when there is not other alternative. The local community is responsible to see this happens.

At the State level, responsibilities for the NFIP rest with the State Insurance Commissioner and the department that handles storm water infrastructure issues. Some of the things the State Commissioner is tasked to do under the NFIP are:

Private Insurers Provide Policies

The Federal government does not provide flood insurance. More than 90 private insurance companies provide this insurance as a special policy, with the backing of the Federal government.

Lending Institutions Provide Awareness

The Flood Disaster Protection Act of 1973 requires lending institutions that are federally regulated to require that properties in flood prone areas have flood insurance to secure the mortgage. Thus lending institutions become one of the main links in the chain that provides flood insurance. Many purchasers learn about their need to purchase flood insurance from their mortgage company.

The Citizen Must be Proactive

Despite the several layers of government writing and enforcing regulations, and private corporations bringing awareness and services to the property owner, the average citizen still has a role to play apart from these. People who purchase property without a mortgage may not know about the availability of flood insurance. Sometimes flood plain boundaries change, and properties once thought to be outside a flood hazard areas a legally placed inside the flood zone. The home or business owner must state aware of flooding issues.

The citizen, working with the local flood plain administrator and their insurance broker, can take the lead in making sure they have coverage. Also, properties not in a flood hazard area can still be protected by flood insurance. The property owner should check the lay of the land around structures, make their own determination of the need for flood insurance, and seek the coverage if needed.

When all members of this partnership know their roles and responsibilities, the NFIP runs like clockwork to provide property owners with flood risk protection.

The copyright of the article Flood Insurance is a Public-Private Partnership in Civil Engineering is owned by David Todd. Permission to republish Flood Insurance is a Public-Private Partnership in print or online must be granted by the author in writing.