Introduction to the National Flood Insurance Program (NFIP) Page: 3 of 29
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Introduction to the National Flood Insurance Program (NFIP)
Contents
Introduction ..................................................................................................................................... 1
Purpose of the NFIP ........................................................................................................................ 1
Reduction of Com prehensive Flood Risk.................................................................................... 2
Risk Mapping, Assessment, and Planning (Risk MAP) and Flood Insurance Rate
Maps (FIRMs) ........................................................................................................................ 3
Flood Zones ........................................................................................................................ 3
Updating Flood M aps ..................................................................................................... 4
Map Corrections ................................................................................................................. 5
State and Local Land Use Controls...................................................................................... 6
Flood M itigation Assistance Grants ...................................................................................... 7
Prim ary Flood Insurance through the NFIP ................................................................................. 8
Standard Flood Insurance Policies (SFIPs).......................................................................... 8
M andatory M ortgage Purchase Requirem ent......................................................................... 9
Preferred Risk Policies (PRPs).................................................................................................11
Increased Cost of Compliance (ICC) Coverage .......................................................................11
Servicing of Policies and Claims M anagem ent.................................................................... 12
Pricing and Premium Rate Structure....................................................................................... 14
Pre-FIRM Subsidy............................................................................................................ 14
Newly M apped Subsidy................................................................................................. 17
Grandfathering Cross-Subsidy...................................................................................... 17
Com m unity Rating System .......................................................................................... 18
Affordability Study and Fram ework ............................................................................. 19
Nonparticipating Com m unities and Com m unity Suspension ................................................... 20
Funding.......................................................................................................................................... 21
Premium Fees and Surcharges ................................................................................................ 21
Appropriations and Offsetting Receipts ............................................................................... 22
Borrowing from the U.S. Treasury, NFIP Debt....................................................................... 24
NFIP Purchase of Reinsurance............................................................................................. 25
Expiration of Certain NFIP Authorities...................................................................................... 26
Tables
Table 1. Flood Zones as Depicted on Flood Insurance Rate Maps (FIRMs)................... 3
Table 2. Maximum Available Coverage Limits for SFIPs by Occupancy Type .............................. 8
Table 3. Types of Com pensation for W YO Com panies ............................................................ 13
Table 4. Phaseout of NFIP Pre-FIRM Premium Subsidy Following Legislation.......................... 16
Table 5. Budget Authority for the NFIP, FY2015-FY2017 ...................................................... 23
Contacts
Author Contact Inform ation ..................................................................................................... 26Congressional Research Service
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Horn, Diane P. & Brown, Jared T. Introduction to the National Flood Insurance Program (NFIP), report, February 13, 2018; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc1157159/m1/3/: accessed April 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.