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buildings nationwide have had four or more losses, or more than two losses that cumulatively equalled or exceeded the building's value, A comprehensive strategy is being developed by the Federal Emergency Management Agency to address the repetitive loss problem, in cooperation with its partners such as the ASFPM, the National Emergency Management Association, Write- Your-Own insurance companies, claims adjusters, and others. The Federal Emergency Management Agency has taken several important programmatic steps in this direction, including incorporating special incentives into the Community Rating System for repetitive loss communities, distributing data to states and communities to help them address their repetitive loss properties, considering increased insurance rates for repetitive loss structures, and specifically targeting Flood Mitigation Assistance Program funds toward repetitively flooded properties. The latter strategy would focus on about 10,000 high-risk repetitive loss structures for mitigation, with an eventual estimated National Flood Insurance Program savings of $65 million annually. Further, some states are using Hazard Mitigation Grant Program funding to implement mitigation measures for their repetitive loss properties, Additional needed policy changes are being considered, including those listed below. . Authorization of a provision for mitigation insurance that would include conditions to deal with repetitive loss structures, . Redefining "substantial improvement" under the National Flood Insurance Program so that improvements to a structure over time are treated cumulatively, rather than each improvement being considered individually, The National Flood Insurance Program should require communities to adopt the cumulative improvement language. . In cooperation with its partners, the Federal Emergency Management Agency needs to develop a clear position on whether "replacement cost" or "market value" should be used when substantial damage or improvement is evaluated. In general, the ASFPM has found that replacement cost is a better standard in coastal areas, while market value works better in riverine locales. . Repetitive losses could be fmancially neutralized by moving to actuariaIly based premiums and/or deductibles on such structures and adjusting coverage unless mitigation measures (including dry and wet floodproofing) are undertaken, If cost-effective and feasible mitigation options are refused by a property owner, premiums for that structure should be increased, . The repetitive loss structures database needs to be cleaned up (perhaps using State National Flood Insurance Program Coordinators) to include data to show the risk and reason for flooding of each structure and to verify building locations, Increased Cost of Compliance Insurance New insurance coverage for Increased Cost of Compliance became effective in May 1997, authorized under the 1994 Flood Insurance Reform Act. This coverage will reimburse a flood policyholder for at least part of the additional cost to rebuild or otherwise mitigate a flood-damaged structure to comply with state and local floodplain management laws. The Federal Emergency Management Agency has set the maximum coverage at $20,000 (effective in May of2000). In response to ASFPM recommendations, the Federal Emergency Management Agency will periodically review Increased Cost of Compliance claims to determine whether the $20,000 maximum is adequate, It is estimated Association of State Floodplain Managers -43- National Flood Programs in Review 2000