1. What is the Federal Emergency Management Agency?
For over twenty years, the Federal Emergency Management Agency's (FEMA's) mission has been to lead America to prepare for, prevent, respond to and recover from disasters. In 1979, through an executive order of President Carter, FEMA was created as a separate federal agency responsible for coordinating national hazard mitigation and recovery efforts. In March 2003 FEMA became part of the newly formed Department of Homeland Security under the Office of Emergency Preparedness and Response.

Today, FEMA manages the National Flood Insurance Program and the U.S. Fire Administration. FEMA continues to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. It also initiates proactive mitigation activities and trains first responders.

2. What is the National Flood Insurance Program?
The National Flood Insurance Program (NFIP) is managed by FEMA and contains three components: flood insurance, floodplain management and flood hazard mapping. Participation in the NFIP is determined by whether the community adopts and enforces floodplain management ordinances in exchange for the protection of federal flood insurance availability to its citizens. Over 20,000 participating communities across the United States voluntarily participate in the NFIP.

Congress authorized the NFIP in 1968 as part of the National Flood Insurance Act, making federal flood insurance available to property owners for the first time. Prior to moving under the sponsorship of FEMA in 1979 (which is now part of the Department of Homeland Security), the NFIP was part of the Department of Housing and Urban Development.

3. What is the difference between the National Flood Insurance Program's (NFIP's) Emergency Program and its Regular Program?
In the Emergency Program FEMA provides a limited amount of flood insurance for the community's citizens at less than actuarial rates in return for an agreement of basic floodplain management to control development.

Communities in the Emergency Program either do not have a flood map that identifies its flood hazard areas or it has a Flood Hazard Boundary Map (FHBM) that approximates the flood hazard areas (because it is not based on a detailed flood study.) For communities that participate in the Emergency Program, flood insurance coverage is limited to $35,000 for a residential building and $10,000 for residential contents. Approximately one percent of the participating communities are in the Emergency Program.

A community that joins the Regular Program is usually provided with a detailed Flood Insurance Study based on an engineering analysis and a Flood Insurance Rate Map (FIRM) that delineates the Special Flood Hazard Areas. In return, the community adopts a more comprehensive floodplain management ordinance, which more fully controls development. In the Regular Program, flood insurance coverage is currently available up to $250,000 for a residential building and $100,000 for residential contents.

4. What happens if a community does not participate in the NFIP?
Although participation in the NFIP is voluntary, properties located in non-participating communities are not eligible for flood insurance through the NFIP and federal disaster assistance is limited.

In the event of a flood disaster, federal disaster assistance is not available for repair or reconstruction of buildings located in the Special Flood Hazard Area (SFHA). Federally backed loans, such as those made through the Federal Housing Administration, the Department of Veteran's Affairs, or the Small Business Administration, cannot be made for acquisition or construction of improved real estate located in the SFHA. However, conventional loans can be made, even on properties in the SFHA.

Even though flood insurance is not available, lending institutions are still required to determine if the improved real estate is within the SFHA. Lending institutions must consider the risks of making loans on these properties given that flood protection is limited. Flood insurance might be available through private insurance companies outside of the NFIP, but at a much higher premium.

5. How does the annexation of land area between communities impact the availability of flood insurance?
When a participating community acquires (through annexation or otherwise) an area from a non-participating community, flood insurance becomes available on properties within the newly acquired area. In order to purchase flood insurance, citizens may need to provide documentation stating that the annexing community has jurisdiction over and administers floodplain ordinances over the annexed area. When a non-participating community acquires an area from a participating community, no new flood insurance policies can be written on properties within the annexed area and existing policies cannot be renewed upon expiration unless and until the non-participating community joins the program.

6. What does it mean if a community is on Probation? What about Suspension?
By participating in the National Flood Insurance Program, communities agree to adopt and enforce floodplain regulations governing construction and development in and around Special Flood Hazard Areas. In return, the federal government makes flood insurance and federal disaster assistance available to the community and its residents. FEMA works with communities to help them comply with this agreement; however, if the community fails to comply and does not correct its actions even after a 90-day written notice, then the community is placed on probation.

The probationary period continues for at least one year, and during that timeframe, a $50 surcharge is added to insurance policies as they are issued or renewed within that community. The purpose of probation is to focus the community's efforts on corrective action so as to avoid suspension.

If a community fails to correct its non-compliant actions, then that community is given 30 days to demonstrate to FEMA why it should not be suspended from the program. If suspended, it becomes a non-participating community, and no new policies can be issued nor can they be renewed. Policies in force at the time of the suspension remain in force until the coverage period expires.


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