Answers to Questions about the National Flood Insurance Program’s Community Rating System
Why the Community Rating System is a good idea for your community
Selling flood insurance is always a challenge for agents, so the eWatermark tries to offer ideas about how to sell your product. As always cost is key, and policy cost can be reduced if the jurisdiction where the insured property is located participates in the National Flood Insurance Program’s (NFIP) Community Rating System (CRS).
Communities that participate in the CRS will have leaders who are aware of the destructive risk of flood damage to their residents. Did you know that more than three-quarters of all presidential disaster declarations are associated with flooding? Flooding in the United States is the #1 natural hazard. A community that is prepared for flooding can reduce damage and avoid personal hardships. Communities that participate in the CRS have made a commitment to go 'the extra mile' to enact safer floodplain management practices, such as building codes that can lead to insurance discounts.
See our recent eWatermark article about CRS, Benefits from Community Floodplain Management Activities through the NFIP Community Rating System.
Some answers to questions about the Community Rating System
Is there any way to obtain a community-wide discount on the cost of flood insurance premiums?
All communities that participate in the NFIP adopt and enforce minimum floodplain management standards for managing construction and development in Special Flood Hazard Areas. Some communities want to achieve a higher level of safety and protection for their citizens than achieved through implementing minimum standards.
When these communities join the NFIP’s CRS, their policyholders may receive a discount on flood insurance premiums. The CRS recognizes communities for their additional efforts to (1) reduce flood damage to insurable property; (2) strengthen and support the insurance aspects of the NFIP; and (3) encourage a comprehensive approach to floodplain management.
Communities that join the CRS receive a rating according to a point system, devised to reflect the level of safety provided through the floodplain management activities they implement. CRS communities are assigned a CRS Class, from Class 10 to Class 1 that establishes the level of premium discount policyholders receive.
The discount on their annual flood insurance premiums can range from 5 percent to as much as 45 percent, based on the community’s CRS Class. Policyholders in a CRS Class 9 community receive the lowest discount of 5 percent. The highest discount of 45 percent is provided in CRS Class 1 communities and requires the most points. The discount applies to policies for properties located in the Special Flood Hazard Area that qualify. Properties located outside the Special Flood Hazard Area receive smaller discounts.
Why would a community want to join the CRS?
Many communities, especially those with severe flood hazards, high rates of growth, or a history of repeated flooding, are aware of the wide range of actions they can take to reduce flood risk in addition to participating in the NFIP. These actions reduce economic devastation to communities, keep their citizens safer, minimize property damage, build resiliency, and foster a better quality of life within the community.
Joining the CRS enables communities to earn insurance premium reductions for their residents for activities already being implemented. Participation in the CRS provides a national benchmark by which a community can measure its performance in floodplain management. It also provides recognition for a job well done and fosters a sense of community pride.
Why don’t all NFIP communities join the CRS?
Some communities believe that participating in the CRS will be too time consuming. It is true that a CRS-participating community must designate a local official to act as the CRS coordinator and point of contact. This person will need to devote some time to become familiar with CRS and complete the application process. After the first year, less time is required as the community standardizes its implementation procedures. Certainly, the time commitment for CRS Class 9 or Class 8 communities is much less than that for CRS Class 3, 2, or 1 community, but the premium discount is also not as great. CRS communities report that the additional commitment is well worth the effort in reduced premiums, a safer community, and increased recognition and awareness of flood risk.
How can I find out if my community is in the CRS?
Individuals can phone the general NFIP information number at 1-800-427-4661 to find out if their community participates in the CRS and to learn about the amount of the premium discount.
If my community is not participating in the CRS, what can I do to have my community join?
The decision to join the CRS is a voluntary action of a community’s elected officials. As with many community actions, citizens – and businesses – can contact their local elected officials and encourage the community to consider learning more about joining the CRS. Additional information can be obtained by calling 1-800-427-4661.
How can I learn more about the CRS?
You can learn about CRS through many sources, including your State Floodplain Coordinator, the CRS newsletter, and by signing up for NFIP email updates on the FEMA NFIP page at http://www.fema.gov/business/nfip/index.shtm. And keep your eye out for information and updates about the CRS here in the eWatermark. FEMA also offers information available at the links below.
For more information about the NFIP and the CRS
Public Awareness Materials Order Form
Answers to Questions about the NFIP
CRS Participating Communities