How the National Flood Insurance Program (NFIP) Works

Policy tenure under the U.S. National Flood Insurance Program (NFIP).

In the United States, insurance against flood hazard (inland flooding or storm surge from hurricanes) has been provided mainly through the National Flood Insurance Program (NFIP) since 1968. The NFIP covers $1.23 trillion of assets today. This article provides the first analysis of flood insurance tenure ever undertaken: that is, the number of years that people keep their flood insurance policy...

Integrated Catastrophic Flood Model for Designing Robust Flood Insurance Program

Affordability of the National Flood Insurance Program: A Case Study of Charleston County, South Carolina

In March 2014, Congress passed legislation to halt discounted flood insurance premiums from increasing to full-risk levels. The rate hike was authorized two years earlier by the Biggert-Waters Act to address the National Flood Insurance Program’s structurally induced $24 billion debt. The recent developments highlight the tension between risk-based premium and affordability of flood insurance f...

Expanding the National Flood Insurance Program to Cover Coastal Erosion Damage

The National Flood Insurance Program does not currently cover damage strictly attributable to coastal erosion. This paper uses the results of a nationwide survey of coastal property owners to estimate the demand for such insurance. We find that there is significant demand at prices in the range of current flood insurance premiums. Demand is influenced in the hypothesized way by increased measur...

Flood Catastrophe Model for Designing Optimal Flood Insurance Program: Estimating Location-Specific Premiums in the Netherlands.

As flood risks grow worldwide, a well-designed insurance program engaging various stakeholders becomes a vital instrument in flood risk management. The main challenge concerns the applicability of standard approaches for calculating insurance premiums of rare catastrophic losses. This article focuses on the design of a flood-loss-sharing program involving private insurance based on location-spe...