Enhance Participation in the Flood Insurance Program

The Challenge

Part of the problem with the NFIP is that too few property owners in harm’s way actually carry flood insurance, despite mandates that they do so if they carry a federally-backed mortgage. Data suggests that only 75 to 80 percent of property owners in flood hazard areas who are required to carry flood insurance actually do so. Property owners need only show they are carrying flood insurance when they close on a mortgage and, as a result of lax enforcement by mortgage lenders, they too often drop insurance afterwards. Although homeowners outside of the 100-year floodplain are not required to, they can carry flood insurance at very little cost.

In the coming years, we know we must continue to invest in Nashville, but do so intentionally, preparing for both acute shocks, such as a flood, and long-term stresses, such as aging infrastructure and access to affordable housing.
Mayor Megan Barry
Nashville, TN

Property owners outside of mapped flood hazard areas are increasingly experiencing flood losses. Increased impervious coverage and development in floodplains, changing rainfall patterns with more frequent heavy rain in some areas, and sea-level rise are factors contributing to this increase in flooding. The challenge for cities is that many residents feel they will not be affected by flooding because their building is not in a mapped flood hazard area, and because they are not required to carry flood insurance. Yet many cities have experienced larger storms in recent years, causing damages well outside of mapped flood hazard areas, including most recently in Baton Rouge, LA; Charleston, SC; Virginia Beach, VA; and Boulder,CO.

The result of this lack of participation is that the NFIP fails to adequately diversify its risk, and property owners who fail to carry coverage often rely on taxpayer-funded disaster recovery assistance to recover after flood damage, if it is available.

The Opportunity

Adding additional insureds to the NFIP would bring in much needed funding, and would help ensure that property owners have flood insurance to support their own recovery, rather than relying on tax-payer-funded disaster assistance. Congress could expand private insurance purchase options and requirements to carry flood insurance. FEMA should also expand and reward education and outreach to encourage greater participation in the NFIP.

Action Steps


Congress should authorize sale of multi-year insurance policies that lock in insurance rates for a period of years to create purchase incentives.

Congress could expand flood insurance purchase requirements for federally-backed mortgages to address increasing flood losses outside of mapped, special flood hazard areas (i.e., beyond the 100-year floodplain). Expanding flood insurance purchase requirements also increases the number of people paying into the program, and can reduce the need for disaster recovery payments to uninsured property owners. For example, Congress could extend flood insurance purchase requirements to the 500-year floodplain, to areas protected by levees (“residual risk areas”) or to properties that receive disaster recovery assistance.


FEMA should fund and enhance education and outreach programs to educate homeowners and businesses about changing flood risks and flood insurance options.

FEMA should also reward CRS-participating communities with points for increasing participation of residents in the program (based upon actual new policies purchased).