NFIP Discounts: Difference between revisions

Revision as of 09:35, 2 December 2024

NFIP Discount Types

The NFIP offers three main types of premium discounts to encourage participation in flood insurance and promote mitigation efforts:

Statutory Discounts

What They Are: Mandated by law to encourage community and property owner participation in the NFIP.

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/Glide Path: These discounts gradually reduce through annual caps on premium increases until the policy reaches its full-risk rate.

A lapse in coverage may result in the loss of eligibility.
Only the most beneficial statutory discount applies if multiple are available.

Mitigation Discounts

What They Are: Incentives for policyholders who implement flood risk-reduction measures, recorded on the application or applied through policy changes.

Examples of Mitigation Actions:

Elevating machinery and equipment (e.g., furnaces, HVAC systems) above the base flood elevation.
Installing proper flood openings (vents) in enclosures to minimize hydrostatic pressure and reduce damage.

Community Rating System (CRS) Discounts

What They Are: Offered to policyholders in communities that exceed minimum floodplain management standards.

How It Works:

Communities earn credit points for activities such as public education, flood mapping, and preparedness efforts.
These points determine the community's CRS class (1–10), with Class 1 providing the highest discount (up to 45%).

Eligibility:

Applies uniformly across eligible properties within the community.
Ineligible for properties with significant floodplain violations or non-compliance with community regulations.

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

This page is a rough draft and will need more work before it's finalized.

This page contains details about the NFIP Application and is written for insurance agents.
Find more in the How To Write section of the NFIP Flood Insurance Manual.

@@ Line 6: / Line 6: @@
 == Statutory Discounts ==
-* '''What They Are''': Mandated by law to encourage community and property owner participation in the NFIP.
+'''What They Are''': Mandated by law to encourage community and property owner participation in the NFIP.
-* '''Eligible Properties''':
-** Pre-FIRM buildings (constructed before the community's initial Flood Insurance Rate Map).
+'''Eligible Properties''':
-** Buildings located in certain zones with specific characteristics (e.g., AR or A99 zones).
+* Pre-FIRM buildings (constructed before the community's initial Flood Insurance Rate Map).
-** Emergency Program properties.
+* Buildings located in certain zones with specific characteristics (e.g., AR or A99 zones).
-* '''Phasing Out/Glide Path''': These discounts gradually reduce through annual caps on premium increases until the policy reaches its full-risk rate.
+* Emergency Program properties.
-* '''Important Notes''':
-** A lapse in coverage may result in the loss of eligibility.
+'''Phasing Out/Glide Path''': These discounts gradually reduce through annual caps on premium increases until the policy reaches its full-risk rate.
-** Only the most beneficial statutory discount applies if multiple are available.
+* A lapse in coverage may result in the loss of eligibility.
+* Only the most beneficial statutory discount applies if multiple are available.
 == Mitigation Discounts ==
-* '''What They Are''': Incentives for policyholders who implement flood risk-reduction measures.
+'''What They Are''': Incentives for policyholders who implement flood risk-reduction measures, recorded on the application or applied through policy changes.
-* '''Examples of Mitigation Actions''':
-** Elevating machinery and equipment (e.g., furnaces, HVAC systems) above the base flood elevation.
+'''Examples of Mitigation Actions''':
-** Installing proper flood openings (vents) in enclosures to minimize hydrostatic pressure and reduce damage.
+* Elevating machinery and equipment (e.g., furnaces, HVAC systems) above the base flood elevation.
-* '''How They Apply''': Discounts are granted based on specific mitigation measures, verified through documentation such as elevation certificates or photos.
+* Installing proper flood openings (vents) in enclosures to minimize hydrostatic pressure and reduce damage.
 ==  Community Rating System (CRS) Discounts ==
-* '''What They Are''': Offered to policyholders in communities that exceed minimum floodplain management standards.
+'''What They Are''': Offered to policyholders in communities that exceed minimum floodplain management standards.
-* '''How It Works''':
-** Communities earn credit points for activities such as public education, flood mapping, and preparedness efforts.
+'''How It Works''':
-** These points determine the community's CRS class (1–10), with Class 1 providing the highest discount (up to 45%).
+* Communities earn credit points for activities such as public education, flood mapping, and preparedness efforts.
-* '''Eligibility''':
+* These points determine the community's CRS class (1–10), with Class 1 providing the highest discount (up to 45%).
-** Applies uniformly across eligible properties within the community.
-** Ineligible for properties with significant floodplain violations or non-compliance with community regulations.
+'''Eligibility''':
+* Applies uniformly across eligible properties within the community.
+* Ineligible for properties with significant floodplain violations or non-compliance with community regulations.
 These discounts encourage long-term mitigation, compliance, and community participation, making flood insurance more affordable while promoting risk-reduction strategies.
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