Be Prepared for the Complexities of the National Flood Insurance Program (NFIP)

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A flooded residential street.

The National Flood Insurance Program (NFIP) can be a saving grace for residents with flood-damaged homes, however it brings complicated requirements that can turn into an unanticipated source of angst for both local governments and residents. If your jurisdiction has Special Flood Hazard Areas (SFHAs), understanding NFIP requirements and rules is vital to helping your community successfully rebuild after a flood.

Navigating the National Flood Insurance Program

From substantial damage to detailed documentation requirements, helping homeowners navigate the NFIP program can become one of the most difficult post-disaster recovery tasks for local leaders. The City of Central, Louisiana, knows this from experience – especially when it comes to substantial damage. After the historic August 2016 Louisiana floods, Central’s local leaders quickly had to educate residents on the concept of substantial damage and other essential program requirements.

Make sure homeowners in your community understand that under the NFIP, a property is considered substantially damaged if damage is equal to or exceeds 50 percent of a building’s fair market value prior to the disaster. Buildings located in SFHAs that are substantially damaged must be elevated above the base flood elevation (BFE) and be brought into compliance with the community’s floodplain ordinance, or be demolished.

“Understanding the details about substantial damage is the single most important recommendation I can make to community leaders,” says Jason Ellis, a City of Central Councilman at the time of the flooding.

In Central, homeowners began requesting damage assessments from their private homeowner’s insurance companies, who in turn quickly sent homeowners checks for the damage. Although the assistance is initially a welcome sight, make sure residents in your community know that FEMA evaluates insurance checks for over half the property’s value as defining the house to be substantially damaged. Homeowners unaware of this may unexpectedly find themselves facing the prospect of raising or demolishing their homes.

Learn more about the City of Central’s experience navigating the NFIP, and see advice from IBTS’s disaster management experts on helping homeowners understand the NFIP program.