Nfip Essay

Decent Essays

The NFIP is an all-inclusive insurance program built to provide citizens located within a designated floodplain to have a reliable means to recover from floods. Therefore, let’s first discuss the provisions of the NFIP, its benefits, consequences of repetitive loss, the status of sustainability, and potential changes to the program in the near future. The NFIP is administered by the Federal Emergency Management Agency (FEMA) and insurance policies are available to those located within a designated flood zone and a participating community (FEMA, 2017). However, though administered by FEMA potential enrollees can only obtain a policy through their local insurance agent. In addition, FEMA determines who is eligible to apply for a policy …show more content…

Fundamentally, a community can accumulate points by completion of various hazard mitigating activities to include public information, mapping and regulations, flood damage reduction, and flood preparedness (FEMA, 2017). Below is a table to illustrate these levels. Now, that we have a basic knowledge of the NFIP let’s discuss its benefits. According to FEMA (2012), the NFIP enables policyholders to have coverage up to 250,000 to 100,000, depending on whether the property is residential or commercial. Moreover, the NFIP enables property owners to file a claim without paying back whether the flood becomes a presidentially declared disaster or not whereas disaster assistance requires payback and the disaster to be presidentially declared (p. 2). Therefore, we can see the program has substantial benefits to those who choose to participate. However, there are significant program sustainability issues. First, repetitive flood loss is something which has plagued the sustainability of the NFIP. Since the inception of the NFIP in 1968, approximately 30,000 properties have been deemed severe repetitive loss properties (10 or more losses), costing the program 5.5 billion dollars (Eastman, 2016). Therefore, we can see those who have been impacted by floods continue to be impacted by floods. Secondly, as mentioned above, lack of

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