National Flood Insurance Program Information

The National Flood Insurance Program (NFIP) was established by congress. Texas residents have a large share of the policies and claims with this program. Special risk factors for Texas include a large coastal area, frequent tropical storms, large areas with low elevation, and rapid property development.

The main purpose of the NFIP is to reduce destructive flooding events and to make affordable flood insurance available to home and business owners. The NFIP works with local governments to develop standards and programs to reduce flooding in developed areas. However it is impossible to prevent flooding so these efforts are combined with an insurance program.

In order to be able to establish a fair rate system, FEMA has established a map system to identify the relative risk of mapped areas. The areas that have a low to moderate risk of flooding are assigned a zone of B, C, or, X. Rates for these areas are quite low and yes, these areas can still suffer major flood damage. High risk zones start with an A or V and statistically have a 26% or greater chance of flooding over the term of a 30 year mortgage.

If you have a home with a mortgage in a high risk flood zone your mortgage company will require that you have a flood policy. You don’t have to get this policy from the NFIP but that is usually the least expensive place for flood insurance. If the home or business was built after 1970 you will probably need an elevation certificate to get NFIP insurance in A or V zone. This measures how high your property is above sea level. There is a one time cost for the certificate that is usually around $300. The certificate is usually well worth the money because of the rate savings with the NFIP.