NFIP Mitigation Discounts

Mitigation discounts are premium reductions offered by the National Flood Insurance Program (NFIP) to policyholders who implement measures to reduce their property’s flood risk. These discounts incentivize proactive steps to minimize damage during flood events and improve community resilience.

Mitigation discounts represent a win-win for policyholders and communities, reducing flood risk while providing cost-saving opportunities.

Machinery and Equipment Above First Floor

Policyholders may qualify for a discount if certain machinery and equipment servicing the building (such as HVAC systems, water heaters, and washers/dryers) are elevated above the first floor to reduce flood damage risk. [1]

• Requirements:
  • For slab-on-grade buildings, machinery must be elevated to at least the attic (for single-story) or second floor.
  • For basements or crawlspaces, machinery must be elevated to the floor above.
  • For elevated buildings, machinery must be at the lowest elevated floor or higher.
• Eligibility: The discount applies to buildings with both building and/or contents coverage where machinery meets these elevation criteria​.

Proper Flood Openings

Proper flood openings (or vents) in enclosures or crawlspaces help equalize hydrostatic pressure on walls, minimizing foundation damage during floods.

• Requirements:
  • A minimum of two openings on opposite walls.
  • Openings must be no higher than one foot above grade.
  • Total net area of openings should equal one square inch per square foot of enclosed area.
• Documentation: Engineered openings certified by professionals or recognized standards, like those of the International Code Council, can qualify buildings for this discount​​.

More detail is available at NFIP Proper Openings.

Floodproofing

Floodproofing involves making non-residential buildings watertight and resistant to flotation or collapse during floods.

• Eligibility:
  • The structure must be floodproofed to at least one foot above the Base Flood Elevation (BFE) in applicable zones.
  • Requires a certified Floodproofing Certificate and approval from FEMA.
• Discount Benefits: Applicable to non-residential properties and some residential properties with approved basement floodproofing​.

More detail is available at Floodproofing.

Agent Best Practices

Agents should follow these guidelines to verify mitigation discounts are being accurately represented on flood insurance policies. Properties that do not qualify for mitigation discounts may have their premiums increased or claims payments adjusted.

• Verify Elevation and Compliance: Ensure machinery, equipment, and floodproofing efforts meet the specified criteria for discounts.
• Collect Documentation: Provide the necessary certifications, such as Elevation or Floodproofing Certificates, to validate eligibility.
• Educate Clients: Help clients understand the long-term savings and risk reduction benefits of mitigation measures.

Additional Resources

For further details on mitigation discounts and eligibility, consult the FIM or FEMA's technical bulletins on flood mitigation.

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