Difference between revisions of "Flood"
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:* The Federal Emergency Management Agency, or ''FEMA'', is <u>allowed</u> to provide flood insurance <u>only</u> to regions that have <u>adopted</u> adequate land use and control measures. | :* The Federal Emergency Management Agency, or ''FEMA'', is <u>allowed</u> to provide flood insurance <u>only</u> to regions that have <u>adopted</u> adequate land use and control measures. | ||
− | :* This is done through local or state laws | + | :* This is done through local or state laws for minimum floodplain management standards as described in FEMA regulations |
===Paragraph 2 (Flood Maps)=== | ===Paragraph 2 (Flood Maps)=== |
Revision as of 22:48, 29 November 2018
Contents
Pop Quiz
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
- funding for NFIP including mechanisms & concerns about sustainability
- Biggert-Waters flood insurance reform act of 2012
The Horn & Brown reading on the National Flood Insurance Program (NFIP) was new to the syllabus for 2018.Fall. It is dated September 12, 2017. The previous NFIP reading was dated February 6, 2013 and although many components of NFIP are unchanged, the reading is organized differently. (It isn't just a minor update.) Many of the exam questions from the old reading are still relevant, however. Questions in the BattleTable that are not relevant anymore are highlighted in tan.
reference part (a) part (b) part (c) part (d) E (2017.Fall #8) funding:
- concerns regarding NFIPparticipation rate:
- why it's low for NFIPparticipation rate:
- how to increasewind coverage under NFIP:
- arguments for & againstE (2017.Spring#8) risk transfer process:
- crop & flood insurance1risk transfer process:
- criticismsE (2016.Fall #9) NFIP challeneges:
- sustainability, assessmentflood plain development:
- ways to reduceE (2016.Spring#9) uninsurability:
- of flood riskfunctions:
- NFIPBiggert-Waters:
- provisionsE (2015.Fall #8) funding:
- NFIPBiggert-Waters:
- NFIP premium subsidiesBiggert-Waters:
- NFIP participation rateE (2015.Spring#9) see Germani.GovtIns
- [Hint: FCC(ES)]statutory mandate:
- NFIPmoral hazard:
- impact on NFIPadverse selection:
- impact on NFIPE (2014.Fall #9) funding:
- NFIPNfunding:
- social securityfunding:
- shortfall for NFIPE (2013.Fall #13) ratemaking principles:
- satisfied by NFIP?improvements:
- to NFIP
- 1 See Germani.GovtIns for the crop insurance part of this question.
- N Part (a.i) on social security is no longer on the syllabus.
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In Plain English!
Intro
Don't bother reading the Summary from the Horn reading. (And no, I'm not using reverse psychology!) It's confusing. I've summarized below what it covers. We'll just use common sense along with old exam problems to predict likely future questions. The point is not to acquire a comprehensive knowledge of NFIP. The point is to memorize as few key facts as possible to be able to answer likely exam questions.
- paragraph 1 (general info)
- purpose of NFIP (flood insurance & mitigation)
- participation in NFIP is voluntary
- paragraph 2 (flood maps)
- FEMA makes FIRMs (FIRMs = Flood Insurance Risk Maps)
- FIRMs identify SFHAs (SFHAs = Special Flood Hazard Areas)
- paragraph 3 (policies)
- there are 3 types of SFIPs (Standard Flood Insurance Policies)
- property owners is SFHAs must buy flood insurance
- property owners in moderate risk areas may buy PRPs (Preferred Risk Policies) that are cheaper
- paragraph 4 (premiums)
- should reflect true costs but some subsidies are available
- paragraph 5 (suspension from NFIP)
- probation or suspension from NFIP makes it hard to get disaster relief
- paragraph 6 (NFIP funding)
- funded by congressional appropriations and premiums
- NFIP owes treasury $25b (serviced by NFIP, not taxpayers)
- repayment schedule is uncertain (NFIP may not be sustainable)
Paragraph 1 (General Info)
Question: what is the purpose of NFIP [Hint: AM&R] (see top of page 2 in Horn & Brown reading)
- Access: provide access to primary insurance (transfers some of the financial risk to the federal government)
- Mitgate & Reduce: mitigate & reduce flood risk through floodplain management standards (these standards are discussed further down)
Question: is participation in NFIP voluntary or mandatory
- participation is voluntary (of course if participation is voluntary, there is risk of adverse selection – only people living in a flood plain would participate but then cost-based rates would be unaffordable)
Question: how is participation in NFIP encouraged
- The Federal Emergency Management Agency, or FEMA, is allowed to provide flood insurance only to regions that have adopted adequate land use and control measures.
- This is done through local or state laws for minimum floodplain management standards as described in FEMA regulations
Paragraph 2 (Flood Maps)
Paragraph 3 (Policies)
Paragraph 4 (Premiums)
Paragraph 5 (Suspension from NFIP)
Paragraph 6 (Funding)
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BattleCodes
Memorize:
Conceptual:
Calculational: