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1 1 (August 1, 2019)

handle is hein.crs/govbaql0001 and id is 1 raw text is: SCongressional * Research Service hnforming the legislative debate since 194~__ Closing the Flood Insurance Gap Updated August 1, 2019 There is a large flood insurance gap in the United States, where many people that are exposed to flood risk are not covered by flood insurance. The National Flood Insurance Program (NFIP) is the primary source of residential flood insurance. More than 22,000 communities participate in the NFIP, with nearly 5.1 million policies providing more than $1.3 trillion in coverage. The NFIP identifies areas at high risk of flooding as Special Flood Hazard Areas (SFHAs). Property owners are required to purchase flood insurance only if (1) their properties are in SFHAs, (2) their communities participate in the NFIP, and (3) they have federally backed mortgages. Because the SFHA boundary is central to NFIP mapping, it may create a false belief that flood risk changes abruptly at the boundary and that properties outside the SFHA are safe and do not need flood insurance. However, about 20% of NFIP claims are for properties outside SFHAs, and all 50 states have experienced floods in the last five years. Recent floods highlight the issue of high uninsured losses. For example, in the October 2015 South Carolina floods, the average NFIP penetration rate in counties with a federal disaster declaration was 5% (Table 1). Nearly 90% of policies in South Carolina were concentrated at the coast, but the flood damage was primarily inland, where few residents were insured (Figure 1). Congressional Research Service https://crsreports.congress.gov IN10890 CRS INSIGHT Prepared for Members and Committees of Conaress