National Flood Insurance Program's Mandatory Purchase Requirement: Policies, Processes, and Stakeholders

摘要

Through the National Flood Insurance Program (NFIP), which was created in 1968 and which the Federal Emergency Management Agency (FEMA) administers, the federal government seeks to reduce the risk, loss, and expense associated with flooding. The program offers flood insurance to property owners and renters in communities that participate in the program by adopting and enforcing ordinances to reduce future flood risks. Certain property owners in Special Flood Hazard Areas (SFHAs) in these communities are required to purchase and retain flood insurance for the life of their mortgage loans, and this is called the mandatory purchase requirement. This study focuses on the practices and procedures associated with the purchase requirement and examines each of the mandatory-purchase categories just described. Although the requirement is seemingly straightforward (and statutorily imposed), the interpretation and application of the requirement varies. Such variation is not unexpected - standards and methods differ from one agency to another as do their approaches to similar issues.