Top 10 Things State Legislators Can Do

As State legislators, you play a crucial role in developing State policy for insurance, floodplain management and emergency management. You can help shape the vision and strategy for promoting sound land use and building practices to prevent flood damage; protecting your constituents with insurance coverage; and assisting victims of disasters.

Preventing damage and fostering insurance protects your constituents and State and local funds. Many disasters are not severe enough to be Federally declared. State and local jurisdictions bear the burden for these disasters in response costs, repair to infrastructure, social service costs, and loss of revenue when homes and businesses flood. Even when disasters are Presidentially declared, disasters are costly to State and local jurisdictions which must pay the 25% non-Federal cost share for grants. Here are some steps you can take:

  1. Encourage your constituents to buy flood insurance.
  2. Insure public buildings.
  3. Make sure that effective land use plans and building codes are in place to ensure location and construction of better and more hazard resistant buildings. Make sure they are in compliance with, or exceed, the minimum National Flood Insurance Program standards and are strictly enforced.
  4. Take a proactive role in floodplain management.
  5. Foster education of insurance agents, adjusters and real estate professionals.
  6. Help ensure lender compliance with the mandatory flood insurance purchase requirements.
  7. Assess the risks your State faces and the adequacy of State capabilities to meet them.
  8. Make sure your State is financially prepared by creating a disaster trust fund.
  9. Encourage local communities to become disaster resistant through pre-disaster planning and prevention.
  10. Find out more about the National Flood Insurance Program.
  1. Encourage your constituents to buy flood insurance.
    • Buying flood insurance is one of the most important things citizens of your State can do to help themselves recover from flood damage.

      The National Flood Insurance Program (NFIP), administered by FEMA, makes federally backed flood insurance available in communities that adopt and enforce floodplain management ordinances to reduce future flood losses. Currently, more than 4.2 million policies representing $524 billion worth of coverage are in force in more than 19,000 participating communities across the United States and its territories.

      Flood damage --unlike wind damage-- is not covered by homeowner's or business insurance policies. This coverage must be purchased separately and is available only in communities that participate in the NFIP. And there is generally a 30-day waiting period before a new flood insurance policy becomes effective.

      People should not rely on disaster assistance in lieu of flood insurance. Disaster assistance is only available when the President issues a major-disaster declaration. Even then, it is quite limited-and usually in the form of a loan that must be repaid with interest. It is hardly a substitute for flood insurance, which also covers losses from small, localized flood events that are not Presidentially declared.

      Flood insurance may be purchased through most insurance companies and licensed insurance agents. Maximum coverage amounts for a single-family home are $250,000 for the structure and $100,000 for its contents. Renters may also purchase up to $100,000 of coverage for their personal belongings. Maximum coverages for businesses are $500,000 for buildings and $500,000 for contents.

      For information about flood insurance, property owners should contact their insurance agent or call the NFIP toll-free information line at 1-800-427-4661.


  2. Insure public buildings.
    • Insuring public buildings against flooding and other natural hazards is an effective risk management tool. Encourage State and local governments to make sure that public buildings are insured against these perils to protect taxpayers and facilitate rapid recovery.


  3. Make sure that effective land use plans and building codes are in place to ensure location and construction of better and more hazard resistant buildings. Make sure they are in compliance with, or exceed, the minimum National Flood Insurance Program standards and are strictly enforced.
    • One of the most effective ways to reduce the potential damage from natural hazards is to integrate mitigation measures into existing land use planning and development processes before disaster strikes. The National Flood Insurance Program (NFIP) is based on a requirement that communities must adopt and enforce floodplain management ordinances that meet or exceed the minimum criteria established by the Federal Emergency Management Agency (FEMA) before residents are able to purchase flood insurance. Communities that adopt more stringent ordinances and take other protective measures may participate in the Community Rating System, enabling their residents to obtain discounts on flood insurance premiums.

      Structures built to NFIP standards are estimated to suffer 80 percent less damage than other structures. The standards of the NFIP are estimated to save more than $1 billion in flood damage per year.

      State Legislatures can also enact statewide building codes to ensure construction of better and more hazard-resistant buildings across the entire State, thus helping to prevent future losses from disasters and save State and local governments money during disaster response and recovery. Statewide building codes provide consistent standards so everyone in the construction process-designers, contractors, suppliers, owners-work with the same standards, rather than the numerous codes that may exist in various jurisdictions. A uniform code facilitates uniform enforcement. State enactment of floodplain management standards that exceed the minimum NFIP criteria further strengthen their communities' collective floodplain management programs.

      Enforcement is key. According to Best's Reviews, an insurance industry publication, experts estimate that losses from Hurricane Andrew could have been reduced by 30 to 40 percent if building codes had been strictly enforced. An additional study by the Factory Mutual Insurance Group indicates that damage to the majority of buildings inspected after Hurricane Andrew could have been reduced by 55 percent if building codes had been strictly enforced.


  4. Take a proactive role in floodplain management.
    • States should play a proactive role in floodplain management. Natural hazards mitigation should be a part of all decisions regarding land use, public safety, housing, economic development, highway and public infrastructure. Support your State Floodplain Manager's role in the decision process.

      States should coordinate NFIP activities within their jurisdiction across all levels of government, across programs and with neighboring States that share the same watershed. With the assistance of the NFIP State Coordinator, States also can provide technical expertise to their localities.


  5. Foster education of insurance agents, adjusters and real estate professionals.
    • Insurance agents are on the front lines of getting the flood insurance product to consumers. It is critical that agents are knowledgeable - armed with up-to-date information about the flood risks and the insurance coverage available. You can help foster agent education by working with your State Insurance Commissioner and making sure that State legislation and regulations governing insurance agents include provisions which mandate questions on flood insurance on licensing exams; continuing education credits for those attending an NFIP seminar to maintain agent licenses; and flood insurance training as a condition for maintaining agent licenses. Similarly, if the State licenses adjusters and real estate professionals, then requirements for licensing and renewal should include flood components.


  6. Help ensure lender compliance with the mandatory flood insurance purchase requirements.
    • The National Flood Insurance Reform Act 1994 requires flood insurance on properties with Federally-backed loans that are located in Special Flood Hazard Areas. Some studies indicate that between one-quarter and one-third of properties required to have flood insurance are not covered, often with tragic consequences. While authority for monitoring lender compliance rests with the Federal regulators, State legislators can help. Be aware of the issue of lender compliance as it affects your constituents. Provide information on the status of lender compliance within your State to the Federal Emergency Management Agency and Federal regulators. As State legislators deal with the banking community, they can let lenders know how important their compliance is to constituents. Look for opportunities to enhance compliance in the changing marketplace for insurance and banking.


  7. Assess the risks your State faces and the adequacy of State capabilities to meet them.
    • With the expected increase in weather-related disasters and greater number of constituents at risk, now is the time to review your State's risk of disaster and its capabilities to meet this risk. Support your State Emergency Management Director and the State Floodplain Manager in this process.


  8. Make sure your State is financially prepared by creating a disaster trust fund.
    • Many States have reserve or "rainy day" funds to cover the costs of specific disasters. Some State legislatures are creating disaster trust funds that provide on-going support for preparedness, response, recovery and mitigation. The National Conference of State Legislators has prepared a model trust fund legislation guidance you can use in your State.

      For example, the Florida Emergency Management Assistance Trust Fund, created by the Legislature in 1993, is funded by a surcharge on residential and commercial property insurance premiums. The fund supports local emergency management programs and mitigation projects and helps cover the required 25-percent non-Federal cost share for Federal disaster assistance. States have created trust-funds from a variety of fees, surcharges, and sources. Trust funds guarantee support for designated projects and secure a long-term, consistent source of funding. Funds can be used to finance pre-disaster mitigation activities; provide the non-Federal cost share for disaster costs during Presidentially declared disasters; and support other preparedness, mitigation, response and recovery projects. They can also provide funds for disasters not severe enough to be Presidentially declared disasters, yet requiring a commitment of State resources.


  9. Encourage local communities to become disaster resistant through pre-disaster planning and prevention.
    • By shifting emphasis to pre-disaster prevention, FEMA is changing the way America deals with disasters. Through various pre-disaster assistance programs, it is helping communities protect themselves from the devastating effects of natural disasters by taking actions that dramatically reduce disruption and loss.

      Disaster resistant communities are able to bounce back from natural disasters with far less damage to property and consequently much less cost for repairs. Moreover, the time lost from productive activity is minimized for both businesses and their employees. Indeed, FEMA estimates that for every dollar spent in damage prevention, two are saved in repairs.

      For more information about how communities in your State can become more disaster resistant communities, please call the FEMA Regional Office.


  10. Find out more about the National Flood Insurance Program.
    • For current and comprehensive information, visit our National Flood Insurance Program Website or contact Edward L. Connor, FEMA's Insurance Industry Liaison at 202-646-3429.

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Last Modified: Monday, 17-Jul-2006 17:25:12 EDT