National Flood Insurance Program

In 1968, Congress created the National Flood Insurance Program (NFIP) in response to the rising cost of taxpayer funded disaster relief for flood victims and the increasing amount of damage caused by floods.

The NFIP makes Federally-backed flood insurance available in communities that agree to adopt and enforce floodplain management ordinances to reduce future flood damage. National Flood Insurance is available in more than 18,000 communities across the United States and it's territories.

The NFIP is managed by the Federal Emergency Management Agency's Federal Insurance Administration and Mitigation Directorate. The Federal Insurance Administration manages the insurance component of the NFIP, and works closely with FEMA's Mitigation Directorate, which oversees the floodplain management aspect of the program.

The NFIP, through partnerships with communities, the insurance industry, and the lending industry, helps reduce flood damage by nearly $800 million a year. Further, buildings constructed in compliance with NFIP building standards suffer 77 percent less damage annually than those not built in compliance. And, every $3 paid in flood insurance claims saves $1 in disaster assistance payments.

The NFIP is self-supporting for the average historical loss year, which means that operating expenses and flood insurance claims are not paid for by the taxpayer, but through premiums collected for flood insurance policies.

Updated: 9/9/1998