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Flood Insurance
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FEMA
Flooding as a national problem
Until the late 1960s, most
property owners were unable to get insurance against flood damage.
Private insurance firms, aware of the potential for catastrophic losses
were unwilling to assume the financial risk. This put the burden
on taxpayers to provide costly disaster relief to a growing number of
flood victims.
In 1968, Congress addressed this issue by creating the National Flood
Insurance Program (NFIP). This federal program provides flood insurance
at a reasonable cost in exchange for the careful management of
flood-prone areas by local communities.
Today the NFIP serves over 4 million customers in over 18,000
communities across the country. It is administered by the Federal
Emergency Management Agency (FEMA) through its Federal Insurance
Administration. To become eligible, a community first enters the
emergency phase of the NFIP by adopting preliminary actions to reduce
the threat of flooding. Everyone in the community can then apply
for limited amounts of flood insurance at federally subsidized rates.
Much higher levels of insurance become available when a community
qualifies for the regular phase of the program. This occurs after
FEMA has conducted a detailed flood study and local officials have
enacted more stringent measures to safeguard life and property from
future flooding. To find out whether your community is eligible,
ask your Farmers Insurance agent.
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