NFIP Discounts: Difference between revisions

Latest revision as of 13:58, 18 February 2025

The NFIP offers three categories of premium discounts that have been created to encourage participation, reduce risk, and promote resilience: statutory, mitigation, and CRS.

Statutory Discounts

Federal law provides general guidelines about how the NFIP develops rates and does not specify all the details contained in the Flood Insurance Manual. However, a handful of policy premium requirements are given direct mandates by the US Code.

Although the discounts are identified separately throughout the Code, they are grouped together in the FIM as Statutory discounts. They exist to encourage a property owner's participation in the NFIP.

Statutory discounts are given for the following circumstances.

Pre-FIRM buildings
Buildings that were Newly Mapped into a Special Flood Hazard Area
Emergency Program properties
Properties in areas undergoing the restoration of flood protection systems

Find more details on the Statutory Discounts page.

Mitigation Discounts

The NFIP offers incentives to policyholders who implement flood risk-reduction measures known as Mitigation Discounts. These building improvements reduce flood damage before it happens, which helps policyholders protect their investment and make recovery easier.

Although mitigation is done as a preventative approach for individuals, it strengthens communities by ensuring more buildings are resilient.

Mitigation discounts are given under the following circumstances.

Elevating machinery and equipment above the building's first floor
Installing proper flood openings in enclosures
Floodproofing

Find more details on the NFIP Mitigation Discounts page.

Community Rating System Discounts

Community Rating System (CRS) Discounts apply at the community level, not to individual buildings. Communities that go beyond NFIP minimum requirements—by improving floodplain management, maintaining drainage systems, or providing public flood awareness programs—earn a CRS Class ranking. All NFIP policyholders in that community then receive a discount, regardless of whether they’ve made individual mitigation efforts.

These discounts encourage long-term mitigation, compliance, and community participation, making flood insurance more affordable while promoting risk-reduction strategies.

This page contains information about the NFIP. Find more NFIP Resources.

@@ Line 1: / Line 1: @@
-{{placeholder}}{{line-nfip-app}}{{info-nfip-sfip}}
+{{info-nfip-sfip}}
-=== NFIP Discount Types Summary ===
+The [[NFIP]] offers three categories of premium discounts that have been created to encourage participation, reduce risk, and promote resilience: '''statutory''', '''mitigation''', and '''CRS'''.
-The NFIP offers three main types of premium discounts to encourage participation in flood insurance and promote mitigation efforts:
-==== 1. Statutory Discounts ====
+== Statutory Discounts ==
-* '''What They Are''': Mandated by law to encourage community and property owner participation in the NFIP.
+Federal law provides general guidelines about how the [[NFIP]] develops rates and does not specify all the details contained in the ''[[Flood Insurance Manual]]''. However, a handful of policy premium requirements are given direct mandates by the [https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter50&edition=prelim US Code].
-* '''Eligible Properties''':
-** Pre-FIRM buildings (constructed before the community's initial Flood Insurance Rate Map).
-** Buildings located in certain zones with specific characteristics (e.g., AR or A99 zones).
-** Emergency Program properties.
-* '''Phasing Out''': These discounts gradually reduce through annual caps on premium increases until the policy reaches its full-risk rate.
-* '''Important Notes''':
-** A lapse in coverage may result in the loss of eligibility.
-** Only the most beneficial statutory discount applies if multiple are available.
-==== 2. Mitigation Discounts ====
+Although the discounts are identified separately throughout the Code, they are grouped together in the ''FIM'' as '''Statutory discounts'''. They exist to encourage a property owner's participation in the NFIP.
-* '''What They Are''': Incentives for policyholders who implement flood risk-reduction measures.
+Statutory discounts are given for the following circumstances.
-* '''Examples of Mitigation Actions''':
+* [[FIRM Date#Pre-FIRM|Pre-FIRM buildings]]
-** Elevating machinery and equipment (e.g., furnaces, HVAC systems) above the base flood elevation.
+* Buildings that were [[NFIP Newly Mapped Eligibility|Newly Mapped]] into a [[Special Flood Hazard Area]]
-** Installing proper flood openings (vents) in enclosures to minimize hydrostatic pressure and reduce damage.
+* [[Community Participation#Emergency Program|Emergency Program properties]]
-* '''How They Apply''': Discounts are granted based on specific mitigation measures, verified through documentation such as elevation certificates or photos.
+* Properties in areas undergoing the restoration of flood protection systems
-==== 3. Community Rating System (CRS) Discounts ====
+{{feedback
+| title =
+| attn = ''Find more details on the '''[[Statutory Discounts]]''' page.''
+| category =
+}}
-* '''What They Are''': Offered to policyholders in communities that exceed minimum floodplain management standards.
+== Mitigation Discounts ==
-* '''How It Works''':
-** Communities earn credit points for activities such as public education, flood mapping, and preparedness efforts.
+The NFIP offers incentives to policyholders who implement flood risk-reduction measures known as '''Mitigation Discounts'''. These building improvements reduce flood damage before it happens, which helps policyholders protect their investment and make recovery easier.
-** These points determine the community's CRS class (1–10), with Class 1 providing the highest discount (up to 45%).
-* '''Eligibility''':
+Although mitigation is done as a preventative approach for individuals, it strengthens communities by ensuring more buildings are resilient.
-** Applies uniformly across eligible properties within the community.
-** Ineligible for properties with significant floodplain violations or non-compliance with community regulations.
+Mitigation discounts are given under the following circumstances.
+* [[Machinery and Equipment|Elevating machinery and equipment]] above the building's first floor
+* Installing [[NFIP Proper Openings|proper flood openings]] in enclosures
+* [[Floodproofing]]
+{{feedback
+| title =
+| attn = ''Find more details on the '''[[NFIP Mitigation Discounts]]''' page.''
+| category =
+}}
+==  Community Rating System Discounts ==
+[[Community Rating System|Community Rating System (CRS) Discounts]] apply at the community level, not to individual buildings. Communities that go beyond NFIP minimum requirements—by improving floodplain management, maintaining drainage systems, or providing public flood awareness programs—earn a CRS Class ranking. All NFIP policyholders in that community then receive a discount, regardless of whether they’ve made individual mitigation efforts.
 These discounts encourage long-term mitigation, compliance, and community participation, making flood insurance more affordable while promoting risk-reduction strategies.
+{{#ev:youtube|0CxDqBy3sN0}}
+{{clear}}
+{{nfip}}