More Flood Insurance Information

How Flood Insurance Became Available
Historically, flood insurance was and still is unavailable solely from the private sector. The catastrophic nature of floods is largely too great a risk for the private insurance industry to profitably provide coverage at an affordable price. The National Flood Insurance Reform Act of 1968 made federal flood insurance available to communities that participate within the National Flood Insurance Program (NFIP).

The National Flood Insurance Program (NFIP)
The NFIP allows participating insurance companies to write and service flood insurance policies in their own name while the Federal Government retains responsibility for underwriting losses. Because these policies are regulated by the NFIP, and the Federal Government has established a modest maximum allowable processing fee the insurance premiums, flood insurance should be comparable regardless of the company used. Different coverage amounts and rating errors, however, can result in substantial insurance premium differences.

To participate within the NFIP, communities are required to implement minimum floodplain development standards and enforce them. These standards help make flood insurance actuarially feasible. The City of Eugene has been participating in the NFIP since September of 1986. Structures constructed prior to the creation of the floodplain hazard maps, known as pre-firm structures, are currently charged lower premiums as they were built before the flood risk was known. Recently approved  

With the exception of Hurricane Katrina, the NFIP is overall self-supporting by borrowing money from another part of the federal government for years with significant losses and repaying with interest in years with less than average claims.

Insurance Resources and Upcoming Changes
Here is more detailed information about flood insurance coverage. The NFIP can be reached directly at 800-427-4661. They can also provide assistance locating local insurance agents that offer flood insurance.

Due to recent NFIP reform legislation it is not possible to fully explain the insurance rate changes particularly for homes built prior to the City of Eugene adopting its first floodplain ordinance in 1985. It is recommended that anyone who owns such properties within the floodplain due their own due diligence. FEMA has dedicated many websites to the implications of this topic.