What is a Participating Community?

The National Flood Insurance Program, NFIP, was initiated in 1968 by the US Congress. This program provides flood insurance for participating communities and property owners. To benefit from NFIP, property owners in participating neighborhoods are obliged to purchase the insurance protection under the administration of the government. This insurance also includes flood loans secured by existing buildings and those undergoing construction in communities participating in NFIP. 

How Does a Participating Community Work?

The main aim of NFIP is to mitigate the hazards that flood cause on private and public properties. The strong desire lead to communities being encouraged to purchase flood insurances regulated by the government. Despite this, communities cannot be compelled to participate in the National Flood Insurance Program, NFIP, that means a community can purchase government flood insurance and state-owned properties or otherwise. A participating community however is a community under NFIP insurance as authorized by Federal Emergency Management Agency, FEMA. In 2018, the United States celebrated 50 years of protecting participating communities from flood damages. Flood insurance policy runs on an average annual budget of $700 but since 2004, the insurance program has been borrowing and accumulated a $25 billion debt by August 2017. 

Implementation 

Quite a lot of communities were affected by disasters as a result of flooding, the US government provided relief for the affected communities through NFIP. However, before a community can enjoy the provisions of NFIP, an agreement must exist between the authorities of the local communities and that of the federal government. While NFIP provided financial reliefs from floods through flood insurance, SFHAs, Special Flood Hazard Areas are also given consideration based on FIRMs. Flood Insurance Rate Maps manage the floodplain management and mapping components of the NFIP Program. Due to heavy insurance claims resulting from flood damages, NFIP borrows from the US treasury and a finding revealed that over $51 billion has been pumped into NFIP between 1978 and 2014.The provisions of NFIP are different from what HFIAA insurance or FEMA aid cater for, so also are their requirements. It is possible for your community to certify the requirements of FEMA or homeowner insurance but this is not a guarantee that these property owners can enjoy the provisions of NFIP.NFIP offers flood insurance for private property owners and even renters, there are certain general requirements for the above listed owners to enjoy the NFIP protection from flood losses. One of the important requirements is that the owners must belong to a participating community, that is, there must be NFIP agreements signed by their communities before the property owners or renters can enjoy the provision of NFIP. The necessity to provide protection for properties within SFHAs gave rise to the first amendment of NFIP by Coastal Barrier Resources Act (CBRA) in accordance to the Flood Disaster Protection Act of 1973. With the amendment of the program, new or significantly improved structures no longer enjoy the provisions of NFIP. Also, the 1994 National Flood Insurance reform Act gave room for NFIP participating communities to surpass the federal requirement limits of developing floodplains. Another reform was made to NFIP in 2004 and 2012 by Flood Insurance Reform act and Biggert-Waters Flood Insurance reform respectively. Further amendment to NFIP was the passage of HFIAA in 2014 which is the Homeowner Flood Insurance Affordability Act, 2014.

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