National Flood Insurance Program

the Flood Insurance Rate Map for confluence of Sinking Creek and New River, at Eggleston in Giles County, shows most of the area with a 1% risk of a flood (Zone X) is also in the floodway (Zone AE)
the Flood Insurance Rate Map for confluence of Sinking Creek and New River, at Eggleston in Giles County, shows most of the area with a 1% risk of a flood (Zone X) is also in the floodway (Zone AE)
Source: Federal Emergency Management Agency (FEMA), Flood Plain Map ID 51071C0240C

Standard homeowners insurance policies do not cover flood risks. Homeowners have to purchase special flood insurance policies, if they want to be compensated after a house is destroyed by rising water. Without the special flood insurance policy, a flood could force homeowners without a lot of spare money to go live with family or become renters.

The Federal government created the National Flood Insurance Program and subsidizes flood insurance policies. Private insurance companies were unwilling to write policies, because they could not calculate the appropriate premiums to charge customers. Premiums are based on risk. The risk of a structure being flooded could not be calculated easily, until recent advances in mapping technology and the development of detailed data such as the National Hydrography Dataset from the US Geological Survey.

Congress changed the rules for Federal disaster relief after a flood in 1968. It established the National Flood Insurance Program, ensuring funding for future recovery after a disaster but imposing requirements on communities to reduce the potential damage from a flood.

Congress could not regulate directly the future construction in floodplains because the Federal government does not issue building permits. In Virginia, that is the responsibility of local towns, cities, and counties. The US Congress overcame this limitation by linking Federally-subsidized flood insurance to changes in local zoning.

In order for landowners to qualify for the Federally-endorsed flood insurance, a political jurisdiction was required to implement a floodplain management ordinance to reduce future flood risks to new construction. Local floodplain management ordinances must be based on Federal Emergency Management Agency (FEMA) identification of areas with different flood risks. Through that linkage, communities with authority to regulate building or establish construction priorities were required to minimize the potential costs of future disaster relief efforts that would be funded by the Federal government.

The Federal Emergency Management Agency classifies areas with at least a 1% chance of flooding each year as Special Flood Hazard Areas (SFHA's). Special Flood Hazard Areas will be inundated by a "base flood."

They are often described as areas within a "100-year" flood plain, but translating the 1% risk to "once-in-100-years" is not accurate. Each year, there is the same 1% chance of a flood. Within a year, there is the same 1% chance every day. Areas with at least a 1% risk of flooding have a 26% chance of flooding over the life of a 30-year mortgage.1

flooding risk in downtown Richmond has been mitigated by construction of flood walls
flooding risk in downtown Richmond has been mitigated by construction of flood walls
Source: Federal Emergency Management Agency (FEMA), National Flood Hazard Layer (NFHL) Viewer

FEMA produces Flood Insurance Rate Maps (FIRMs) so property owners and insurance companies are aware of the flood risk on every parcel within participating communities. On the flood maps, areas with at least a 1% annual chance of flooding are shaded and identified by codes that start with the letter "A."

Floodways, the channels of streams carrying most floodwaters where development is largely prohibited, are coded AE. Areas between the limits of the 100-year and 500-year floods are shaded and marked with codes "B" or "X." Areas with limited flood risk outside the 500-year flood plain (with less than a 0.2% chance of flooding each year) are not shaded on the map, and coded with a "C" or "X."2

Flood Insurance Rate Maps define areas of flooding risk
Flood Insurance Rate Maps define areas of flooding risk
Source: Federal Emergency Management Agency (FEMA), Flood Plain Map ID 51059C0260E

Hoeowners are not required by law to buy flood insurance. Few lenders will provide a mortgage for a house that is at-risk and uninsured, but homeowners without a mortgage are able to drop insurance or avoid buying it. In Virginia, 69% of the houses located within Special Flood Hazard Areas do not have flood insurance policies.

Politicians recognize that most homeowners are voters in a local juridisdiction, and voters/homeowners want the ability to get a mortgage. The Federal incentive has convinced 21,000 communities to manage development in floodplains more agressively.3

By 2018, FEMA had completed Flood Insurance Rate Maps for 290 Virginia towns, cities, and counties that participated in the National Flood Insurance Program - including 29 considered "Minimally Flood Prone" and 11 "with No Special Flood Hazard."

Within Virginia, FEMA maps identified hazard areas in 18 local jurisdictions that chose not to participate in the National Flood Insurance Program. Within those jurisdictions, zoning ordinances did not meet FEMA requirements.

One of 18 was the City of Galax, which withdrew from the program in 1982. Also included were the Town of Dendron (suspended from the program in 1992) and the County of Louisa (suspended in 2016). As a result, property owners in those 18 jurisdictions did not qualify for subsidized flood insurance.4

Mathews County has stayed within the National Flood Insurance Program, but was at risk of being suspended in 2018 after county officials authorized a building permit for the Islander Restaurant on Gwynn's Island. The restaurant was a local icon that had closed after being damaged by Hurricane Isabel in 2003, and its assessed value had dropped 99% from $300,000 to $3,000.

Repairing the restaurant would require $1 million. Repairs exceeding 50% of its value trigger the requirements of the National Flood Insurance Program to use the Flood Insurance Rate Maps. The lowest occupied floor of the repaired restaurant building would have to be at least four feet higher to get out of the floodplain, substantially increasing the costs to put the building back into use.

Mathews County supervisors initially approved rebuilding the Islander Restaurant at its old height. The owners argued to the supervisors that the value of the commercial business should be based on its 2002 assessment. That 2002 value, before Hurricane Isabel and closure, was much higher. Using the 2002 value would allow much more repair work without crossing the 50% threshold.

Local officials also justified their approval by noting the restaurant would be a contributing structure in the Gwynn's Island Historic District. The district was not established yet, however, and the history of the struture did not provide an automatic exemption to the Federal floodplain ordinance requirements.

A week later, the Mathews County supervisors reversed their vote in order to ensure the county would stay within the National Flood Insurance Program.

The director of the Virginia Department of Conservation and Recreation had advised that their action would be seen as a violation of the requirements set by the Federal Emergency Management Agency could have led to suspension from the National Flood Insurance Program (NFIP). If that had occurred, each of the 1,400 property owners in the county with flood insurance would have been required to pay an additional $50 per year. In addition, the state official also highlighted a serious concern for a county exposed annually to hurricanes and major "northeaster" storms:5

It is also very important that you understand that communities which have been suspended from the NFIP are ineligible for certain kinds of federal disaster aid, grants and loans such as in the event of a hurricane or other disaster

Between 1978-2012, Virginians filed over 40,000 flood insurance claims with the Federal Emergency Management Agency and received nearly $600 million in Federal flood payments. The jurisdictions with the greatest number of claims are all in Hampton Roads - the cities of Norfolk, Hampton, Poquoson, Virginia Beach, and Chesapeake. The only jurisdictions in which Federal flood insurance claims had not been paid were the towns of Clinchport, Lebanon, Iron Gate, Strasbug, and Louisa County.6

In the future, there may be a greater focus on reducing risk as well as paying for recovery after a disaster. The Government Accountability Office reported in 2010:7

currently nearly one in four policyholders does not pay full-risk rates, and many pay a lower subsidized or "grandfathered" rate. Reducing or eliminating less than full-risk rates would decrease costs to taxpayers but substantially increase costs for many policyholders, some of whom might leave the program, potentially increasing postdisaster federal assistance... Increasing mitigation efforts to reduce the probability and severity of flood damage would also reduce flood claims in the long term but would have significant up-front costs that might require federal assistance.

only a small percentage of Virginia jurisdictions manage floodplain development so their residents qualify for a discount on flood insurance
only a small percentage of Virginia jurisdictions manage floodplain development so their residents qualify for a discount on flood insurance
Source: Federal Emergency Management Agency (FEMA), National Flood Insurance Program Community Rating System

If communities remove existing development from flood-prone areas, risk is reduced. That option becomes politically viable only after a disaster, when property owners might be willing to accept a cash payment and avoid the headache of rebuilding.

Private insurance companies are now able to assess flooding risks and set premiums, and have started to sell flood insurance policies in some states such as Florida. A company called CoreLogic can calculate a Flood Risk Score that has more increments than the binary "in flood plain - outside flood plain" choice of the National Flood Insurance Program.

CoreLogic calculates six levels, from Very Low to Extreme risk, for structures in the 100-year and 500-year floodplains. Within Virginia, it claims 17% of the structures at risk are not placed within Special Flood Hazard Areas on Flood Insurance Rate Maps.8

the Fairfax Campus of George Mason University is mapped with code X and is not shaded, so it is outside the 500-year flood plain
the Fairfax Campus of George Mason University is mapped with code X and is not shaded, so it is outside the 500-year flood plain
Source: Federal Emergency Management Agency (FEMA), Flood Plain Map ID 51059C0260E

The First Street Foundation reported in 2020 that the flood risk maps from the Federal Emergency Managenent Agency understated the number of properties at risk in many Virginia jurisdictions.9

the Fairfax Campus of George Mason University is mapped with code X and is not shaded, so it is outside the 500-year flood plain
the Fairfax Campus of George Mason University is mapped with code X and is not shaded, so it is outside the 500-year flood plain
Source: New York Times, New Data Reveals Hidden Flood Risk Across America (from First Street Foundation)

in 30 years, the flood risks will increase in the Ghent neighborhood of Norfolk
in 30 years, the flood risks will increase in the Ghent neighborhood of Norfolk
Source: Flood Factor, Norfolk, Virginia

Coastal Barrier Resources System

Floods and Floodplains

Will Norfolk (and the Rest of Hampton Roads) Drown?

Stormwater Management in Virginia

flood walls and levees protect new development planned on the floodplain across the Roanoke River from Carilion Roanoke Memorial Hospital
flood walls and levees protect new development planned on the floodplain across the Roanoke River from Carilion Roanoke Memorial Hospital
Source: US Army Corps of Engineers, National Levee Database

Links

flooding risk in downtown Norfolk
flooding risk in downtown Norfolk
Source: Federal Emergency Management Agency (FEMA), National Flood Hazard Layer (NFHL) Viewer

References

1. "The Reality of the 100 year flood - Separating Myth From Fact," Insurance Associates, https://insassoc.com/reality-100-year-flood-separating-myth-fact/ (last checked December 8, 2018)
2. "Definitions of FEMA Flood Zone Designations," Federal Emergency Management Agency, https://msc.fema.gov/webapp/wcs/stores/servlet/info?storeId=10001&catalogId=10001&langId=-1&content=floodZones&title=FEMA%20Flood%20Zone%20Designations (last checked September 22, 2013)
3. "What is the National Flood Insurance Program (NFIP)?," Answers to Questions about the National Flood Insurance Program, Federal Emergency Management Agency, http://www.fema.gov/media-library/assets/documents/272?id=1404; "Filling Virginia's Flood Insurance Gap," Bacon's Rebellion, November 28, 2018, https://www.baconsrebellion.com/wp/filling-virginias-flood-insurance-gap/ (last checked December 8, 2018)
4. "The National Flood Insurance Program Community Status Book - Virginia," Federal Emergency Management Agency, September 23, 2013, http://www.fema.gov/cis/VA.html (last checked September 22, 2012)
5. "Mathews supervisors reverse decision to assist restaurant," Daily Press, September 9, 2018, http://www.dailypress.com/news/hampton/dp-nws-mathews-county-flood-20180906-story.html; "Board action may have placed residents' flood insurance at risk," Gloucester-Mathews Gazette-Journal, September 5, 2018, https://www.gazettejournal.net/index.php/news/news_article/board_action_may_have_placed_residents_flood_insurance_at_risk; "Board seeks way to help Islander reopen," Gloucester-Mathews Gazette-Journal, February 28, 2018, http://www.gazettejournal.net/index.php/news/news_article/board_seeks_way_to_help_islander_reopen (last checked September 10, 2018)
6. National Flood Insurance Program, Loss Statistics, http://bsa.nfipstat.com/reports/1040.htm (last checked June 20, 2012)
7. "Flood Insurance: Public Policy Goals Provide a Framework for Reform," GAO-11-429T, testimony before the Subcommittee on Insurance, Housing, and Community Opportunity, Committee on Financial Services, House of Representatives by the Government Accountability Office on March 11, 2011, http://www.gao.gov/assets/130/125706.pdf (last checked June 20, 2012)
8. "Flood Risk Score," CoreLogic, 2010, https://www.corelogic.com/downloadable-docs/1_flood-risk-score-data-sheet_1302_01final.pdf; "Spotlight on: Flood insurance," Insurance Information Institute, https://www.iii.org/article/spotlight-on-flood-insurance; "Data Brief: CoreLogic Analysis Shows More Than 20 Percent of US Properties at Risk of Flood Are Outside of Designated Special Flood Hazard Areas," CoreLogic, December 1, 2017, https://www.corelogic.com/news/data-brief-corelogic-analysis-shows-more-than-20-percent-of-us-properties-at-risk-of-flood-are-outside-of-designated-special-flo.aspx (last checked December 8, 2018)
9. "New Data Reveals Hidden Flood Risk Across America," New York Times, June 29, 2020, https://www.nytimes.com/interactive/2020/06/29/climate/hidden-flood-risk-maps.html (last checked August 27, 2020)


Floods and Floodplains
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