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<br />that the average cost of bringing a structure into compliance is about $57,500, This was arrived at <br />by combining averages for the cost of acquisition, floodproofing, and elevation, and was weighted <br />to reflect construction types found in parts of the country with the highest numbers of repetitively <br />flooded properties, Thus this figure may not reflect the average cost nationwide. A similarly generated <br />average cost for elevation is $34,400 per structure. <br /> <br />. The Increased Cost of Compliance provision could be made more effective by relaxing the <br />eligibility requirements so more damaged structures could receive Increased Cost of Compliance <br />mitigation funds (after over two years, fewer than 150 structures have qualified for this mitigation <br />help); implementing the third provision of the Increased Cost of Compliance law, which allows <br />the Director of the Federal Emergency Management Agency to impose Increased Cost of <br />Compliance when it is "beneficial to the National Flood Insurance Program Fund;" and <br />encouraging property owners to undertake mitigation by increasing the amount of funding <br />available, <br /> <br />Residual Risk of Dams and Levees <br /> <br />An evaluation of the residual flood risk below dams and behind levees should determine the proper <br />policy regarding insurance requirements and rates. Given the potential for catastrophic losses from <br />failure, these residual risk areas might best be classified with something other than the standard B, <br />C, or X Zones, A special residual risk zone might provide for the implementation of the mandatory <br />insurance purchase requirement, or might allow for appropriate rates, or both, to reflect the hazard. <br /> <br />. The failure zones of all dams, levees, and floodwalls should be identified on all flood maps, Flood <br />insurance in these zones should be mandatory, with rates based on the residual risk. <br /> <br />Increasing the Number of Flood Insurance Policies <br /> <br />After 30 years and despite a doubling in the past five years, the number of flood insurance policies <br />is still unacceptably low. Nationwide, only about 25% of structures in flood hazard areas are covered <br />by flood insurance, This is partly due to a lack of understanding of both the flood risk and the <br />insurance offered and, until recently, minimal enforcement of the mandatory purchase provisions for <br />flood insurance, Yet the basic premise of using an insurance pooling mechanism to shift the risk of <br />flood damage from all taxpayers to those that have chosen to live at risk is good public policy. <br />Unfortunately, at present there is little recognition of the exposure of individuals and the nation to <br />catastrophic loss due to lack of coverage, As a point of comparison, an at-risk structure in a <br />floodplain will have better than a 25% chance of being flooded by the I % chance flood at some time <br />during its 30-year mortgage, but there is only a 1 % chance that this same structure would have a fire, <br />Yet few, if any, homeowners or lenders would even consider foregoing fue insurance. <br /> <br /> <br />Mandatory Purchase <br /> <br />The 1994 ASFPM review document called for mandatory purchase elements of the National Flood <br />Insurance Program to be revised to provide for the escrow of flood insurance premiums; impose <br />penalties on lenders for noncompliance; withhold disaster relief from those who willingly drop <br />coverage; and provide authority for individuals and agencies to sue agents and lenders that fail to <br />enforce the purchase requirements. <br /> <br />Association of State Floodplain Managers <br /> <br />-44- <br /> <br />National Flood Programs in Review 2000 <br />