Affordability of National Flood Insurance Program Premiums Report 1 (2015) / Chapter Skim
Currently Skimming:
1 Introduction
1 Introduction
Pages 11-22
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 11... ...
That land settlement pattern is the result of both individual choices and government programs and policies that considered pros and cons of living and working in those areas that have flood risks. Many people who live in areas subject to flood risk do so because of historical, economic, and other circumstances, such as needing or wanting to live close to work, schools, health care, and so on.
|
From page 12... ...
. Beyond setting flood-insurance premiums, issuing policies, and paying for claims, FEMA provides technical knowledge of flood risks to local professional staff and provides risk mapping for premium setting and risk communication purposes.
|
From page 13... ...
The legislation stipulated that the US Treasury would be prepared to serve as the reinsurer, and would pay claims attributed to catastrophic-loss events so that private insurers did not need to include that cost in premiums. The result was that an NFIP risk-based premium for a property might not be based on the full risk associated with the property.3 Second, existing properties at especially high risk for flooding might require private insurers to set premiums at extremely high levels.
|
From page 14... ...
To motivate voluntary insurance purchase, there has been enhanced NFIP marketing of its polices, support for building floodplain-management expertise at the local level, development of the preferred-risk policy (PRP) , WYO agent training, and such other reforms as imposing a waiting period to prevent coverage purchase only right before a flood event.
|
From page 15... ...
Concerns regarding long-term NFIP fiscal soundness led to Congress's passage of the Biggert–Waters Flood Insurance Reform Act of 2012. A goal of the legislation was to transition toward an insurance program whose premiums reflected expected flood losses on all insured properties; all NFIP policies would have risk-based premiums.
|
From page 16... ...
In addition, communities where those effects might occur argued that higher premiums might depress real estate values, business profitability, and neighborhood viability. Furthermore, Congress had heard concerns that higher insurance premiums might discourage voluntary purchases and thereby reduce flood insurance takeup rates.
|
From page 17... ...
a This analysis will apply different methods for conducting a flood insurance affordability analysis for a state (North Carolina) in which data on eleva tions of structures and hydrologic flood hazards are readily available.
|
From page 18... ...
to refer to "targeted assistance to flood insurance policy hold ers based on their financial ability to continue to participate in the National Flood Insurance Program." Although there is no explicit definition of affordability, use of the phrases means-testing and financial ability suggests that Congress expected affordability to be defined in relation to an NFIP policy holder's income or wealth. That is consistent with the understanding of the term in the present report.
|
From page 19... ...
(a) IN GENERAL. -- The Administrator shall prepare a draft affordability framework that proposes to address, via programmatic and regulatory changes, the issues of affordability of flood insurance sold under the National Flood Insurance Program, including issues identified in the affordability study required under section 100236 of the Biggert–Waters Flood Insurance Reform Act of 2012 (Public Law 112–141; 126 Stat.
|
From page 20... ...
This document is the first of two reports from this committee. In keeping with the statement of task, this report offers and discusses alternative definitions of affordability, provides a framework for policymakers to use in designing assistance programs to make flood insurance more affordable, identifies options that in principle may make flood insurance more affordable, and describes possible benefits, drawbacks, and implications of the policy options for addressing affordability concerns.
|
From page 21... ...
It will discuss metrics for evaluating affordability policy alternatives described in the present report and possible computational procedures for estimating the effects of policy actions on each of the metrics. The second report will inform FEMA on costs of data collection and implementation of analytic protocols, including a sampling strategy for FEMA to use in implementing a national study.
|
From page 22... ...
Inasmuch as this is the first of two reports, Chapter 8 describes briefly the objectives of the second report and its relationship to the findings of the present report. The audience for this report includes FEMA; other relevant federal agencies, such as the Department of Housing and Urban Development; Congress and congressional staff; governors of states that have flood-prone communities; mayors and citizens of flood-prone communities, especially NFIP policy holders; university faculty and other experts in the fields of natural hazards and flood insurance; local and state officials who have NFIP implementation responsibilities; and private sector experts, including insurance companies, mapping companies, and other firms that advise on flood insurance and floodplain management issues.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.