National Flood Insurance Program
Frequently Asked Questions
What is the National Flood Insurance Program (NFIP)?
The National Flood Insurance Program (NFIP) is a federally subsidized program that provides federal flood insurance to property owners in places where private insurance companies will not offer policies. Flood insurance is typically required to secure a construction loan in flood risk areas.
The Federal Emergency Management Agency (FEMA) administers NFIP. By controlling flood insurance, NFIP is intended to guide construction away from flood prone areas and limit development on high-risk lands. Ultimately, NFIP is supposed to minimize insurance claims and protect citizens from harm.
What is the problem with NFIP?
Instead of guiding development away from floodplains, NFIP has actually had the opposite effect – the federal insurance has actually subsidized development in risky areas.
Floodplain development increases the risk of devastating floods, increases taxpayer costs, and degrades habitat and water quality. Unfortunately, natural floodplains are often considered prime building locations and rarely receive the protection they deserve.
How does floodplain development contribute to these negative consequences?
Natural floodplains provide a wide land surface where floodwaters can collect and begin to soak into the ground. This "buffer" of land and vegetation along a river or coastline also provides the following important services to people and wildlife:
- Habitat for fish and other riparian species
- A reduction in stormwater magnitude and velocity
- Filtration of pollutants
- Attenuation of storm energy
As climate change accelerates, scientists project that floods will become more frequent and severe, further harming species and habitats and putting humans and property at risk.
What is happening to fix the problem?
In 2008, the National Marine Fisheries Service (NMFS) found that the administration of the NFIP is contributing to the extinction of salmon and orca in Puget Sound. The Endangered Species Act (ESA) requires that the actions of federal agencies not jeopardize threatened and endangered species or destroy the habitat upon which these species depend for survival and recovery.
NMFS's findings mean that FEMA must make specific changes to the NFIP to prevent further development in floodplains. These common-sense changes include:
- Updating floodplain maps
- Requiring stronger minimum floodplain protections to qualify for flood insurance
- Improving the habitat value of levees
- Mitigating any degradation of salmon habitat in floodplains that was allowed by the NFIP
Unfortunately, in April 2009 FEMA issued a policy statement reneging on their agreement to strengthen protections for floodplains in Puget Sound. In a letter to NMFS, FEMA made clear that they would no longer require or enforce new guidelines as required under the Endangered Species Act.
What is National Wildlife Federation (NWF) doing about it?
NWF is working to ensure that FEMA lives up to their responsibilities to protect the public from devastating floods and to protect floodplain habitat, so that salmon and orca will have a chance to thrive.
Specifically, our goals are to:
- Increase protection and restoration of floodplain areas to enhance salmon and riparian habitat
- Improve water quality in Puget Sound
- Get people out of harm’s way
- Reduce the costs of flood damage
- Accommodate increased stormwater resulting from climate change
Through this work, we hope that Puget Sound can become a model for smart stormwater management that can be implemented throughout the country. Our work will extend to locations where additional endangered species may be harmed by the National Flood Insurance Program.