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<br />Insurance <br /> <br />Flood insurance is an essential mechanism for transferring the costs of flood losses from <br />taxpayers to property owners through flood insurance premiums. Flood insurance also <br />encourages mitigation by providing rating and premium incentives and helps cultivate individual <br />responsibility and accountability for floodplain land use decisions. More than 4 million flood <br />insurance policies are in force, although they may cover fewer than one-third of those who need <br />coverage, both inside and outside of high-risk areas. Since the passage of the National Flood <br />Insurance Reform Act (NFIRA) of 1994, lender compliance with the mandatory purchase <br />requirement has improved considerably; however, many mortgaged properties still do not have <br />flood insurance. <br /> <br />Through the Cover America I and II campaigns, the Federal Insurance Administration (FIA) is <br />effectively marketing flood insurance and building a recognizable "Be Flood Alert" logo for the <br />NFIP. Some flood insurance sales can be attributed directly to advertising, with the biggest <br />impact in low- to medium-risk areas. Despite FIA's efforts and successes, the market <br />penetration of flood insurance has not reached desired levels. If the NFIP is to fully achieve its <br />objectives, strategies must be developed that will increase the number of property owners who <br />have flood insurance, both inside and outside of the special flood hazard area, and ensure that <br />flood insurance policies do not lapse. The following questions are intended to capture some of <br />the issues surrounding flood insurance: <br /> <br />. Should the flood insurance Mandatory Purchase Requirement be extended to apply outside of <br />the 100-year floodplain? Are there other ways to increase coverage in these areas? <br /> <br />. Are there methods to improve implementation of the Mandatory Purchase Requirement by <br />Federal agencies and lenders? <br /> <br />. Are there ways to ensure that, once purchased, flood insurance policies remain in place? <br /> <br />. Are there ways to increase insurance coverage to buildings not subject to the Mandatory <br />Purchase Requirement? <br /> <br />. Should flood insurance be required behind levees? <br /> <br />. Is the current flood insurance rating model sufficient, or are there other methods to rate the <br />flood risk? <br /> <br />Floodplain Management Forum <br /> <br />5 <br />