NFIP Participating communities

Did you know that a typical U.S. homeowners insurance policy does NOT cover damages caused by flooding? Flood damage, whether from rivers, coastal storms or heavy rainfall, is not covered unless you get a separate flood insurance policy. According to the Department of Homeland Security, 90% of natural disasters in the U.S. involve flooding, so it is more likely that many realize.

Currently, the National Flood Insurance Program (NFIP), managed by FEMA, provides the primary solution. Flood insurance is available to anyone, but only if their community participates in the NFIP. To participate, a community must conduct a Flood Insurance Study, have Flood Insurance Rate Maps issued, and enforce building codes and flood level guidelines for new constructions. Unfortunately, 2,283 U.S. communities do not participate in the NFIP even though many of them are in flood-prone areas. 

Consider Hurricane Helene which struck the U.S. in the end of Sepetmber 2024. Besides coastal flooding and wind damage, the hurricane caused catastrophic inland flooding due to heavy rainfall, which triggered FEMA major disaster declarations for Florida, Georgia, North Carolina, South Carolina and Tennessee. 

The map shows Georgia counties eligible for FEMA Individual Assistance (below is the map for all the states affected by Helene). The intensity of the red shading reflects the share of houses at risk that are insured (i.e. the number of flood policies to the number of properties at risk according to First Street), with darker red representing counties that have fewer share of insured properties.

Coastal areas generally have higher proportion of properties insured, likely due to the history of floods. However, there is a stark contrast inland with fewer homes insured.

Moreover, some communities (marked with blue dots) have chosen not to participate in the NFIP leaving homeowners without access to the federally backed flood insurance. These communities are also excluded from other benefits, for example their access to FEMA disaster assistance or mitigation funding is limited. 

Many of these non-participating communities are smaller, suggesting that a lack of institutional experience could be a barrier to joining the NFIP. This highlights a potential role for FEMA to assist smaller communities with implementing the program, consolidating resources, and improving flood insurance access and overall resilience.