When Congress authorized the National Flood Insurance Program (NFIP) in 1968, it intended for the program to encourage community initiatives in flood risk management, charge insurance premiums consistent with actuarial pricing principles, and encourage the purchase of flood insurance by owners of flood prone properties, in part, by offering affordable premiums. The NFIP has been reauthorized many times since 1968, most recently with the Biggert-Waters Flood Insurance Reform Act of 2012 (BW 2012). In this most recent reauthorization, Congress placed a particular emphasis on setting flood insurance premiums following actuarial pricing principles, which was motivated by a desire to ensure future revenues were adequate to pay claims and administrative expenses. BW 2012 was designed to move the NFIP towards risk-based premiums for all flood insurance policies. The result was to be increased premiums for some policyholders that had been paying less than NFIP risk-based premiums and to possibly increase premiums for all policyholders.
Recognition of this possibility and concern for the affordability of flood insurance is reflected in sections of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA 2014). These sections called on FEMA to propose a draft affordability framework for the NFIP after completing an analysis of the efforts of possible programs for offering "means-tested assistance" to policyholders for whom higher rates may not be affordable.
BW 2012 and HFIAA 2014 mandated that FEMA conduct a study, in cooperation with the National Academies of Sciences, Engineering, and Medicine, which would compare the costs of a program of risk-based rates and means-tested assistance to the current system of subsidized flood insurance rates and federally funded disaster relief for people without coverage. Production of two reports was agreed upon to fulfill this mandate. This second report proposes alternative approaches for a national evaluation of affordability program policy options and includes lessons for the design of a national study from a proof-of-concept pilot study.
National Academies of Sciences, Engineering, and Medicine. 2016. Affordability of National Flood Insurance Program Premiums: Report 2. Washington, DC: The National Academies Press. https://doi.org/10.17226/21848.
|2 An Approach to Policy Evaluation for the National Flood Insurance Program
|3 Data for Analyses of National Flood Insurance Program Policy Options
|4 Analytical Next Steps and Further Findings for Affordability Policy Options
|List of Acronyms
|Appendix A: Affordability of National Flood Insurance Program Premiums: Report 1 Summary
|Appendix B: Recent Reports Produced by the Government Accountability Office and the Congressional Research Service
|Appendix C: Biggert-Waters Flood Insurance Reform Act of 2012 - Section 100236
|Appendix D: Homeowner Flood Insurance Affordability Act of 2014 - Section 16
|Appendix E: Biographical Sketches of Committee Members
|Appendix F: Letter to the Committee from Senator Mary L. Landrieu, Louisiana
|Appendix G: American Community Survey 5-Year Data Products
|Appendix H: Tables of Data Fields Found in the NFIP Policy Database October 2013 Version
|Appendix I: Task Statements for Affordability of National Flood Insurance Program Premiums - Report 1 and Report 2
The Chapter Skim search tool presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter. You may select key terms to highlight them within pages of each chapter.
The National Academies Press (NAP) has partnered with Copyright Clearance Center's Marketplace service to offer you a variety of options for reusing NAP content. Through Marketplace, you may request permission to reprint NAP content in another publication, course pack, secure website, or other media. Marketplace allows you to instantly obtain permission, pay related fees, and print a license directly from the NAP website. The complete terms and conditions of your reuse license can be found in the license agreement that will be made available to you during the online order process. To request permission through Marketplace you are required to create an account by filling out a simple online form. The following list describes license reuses offered by the NAP through Marketplace:
Click here to obtain permission for the above reuses. If you have questions or comments concerning the Marketplace service, please contact:
US Toll Free +1.855.239.3415
To request permission to distribute a PDF, please contact our Customer Service Department at firstname.lastname@example.org.