NFIP by the Numbers and 10 Reasons It Matters

The National Flood Insurance Program (NFIP) is a cornerstone of the nation's flood risk management system, providing protection that is largely unavailable in the private insurance market. By delivering more than $1.2 trillion in coverage, supporting hundreds of thousands of home sales each year, and helping communities invest in safer development and flood mitigation, the NFIP benefits property owners, local governments, and taxpayers alike. The following statistics and top 10 reasons illustrate the program's critical role in promoting financial security, disaster recovery, economic stability, and community resilience nationwide.

NFIP by the Numbers

Insurance Coverage:
1. Over $1.2 trillion: Total flood coverage not available in the private market.
2. Nearly 5 million policyholders and 22,000 communities covered.
Economic Benefit:
1. $63 billion: Contribution to the U.S. economy.
2. Half million home sales each year.
3. Over 1 million jobs created.
Disaster Assistance:
1. $250,000 of coverage for building replacement versus $4,000 of FEMA aid and an SBA loan with 3% interest to be repaid with the mortgage.
2. Roughly $18 billion available to support NFIP claims and obligations:
  1. $5 billion: National Flood Insurance Fund.
  2. $3 billion: Reserve Fund.
  3. $8 billion: Borrowing authority.
  4. $2 billion: Reinsurance coverage.
Risk Reduction & Local Control:
1. Mapping & Mitigation: Local governments map floodplains and regulate buildings to participate in the NFIP.
2. Each $1 spent = $6 saved. Each mitigation dollar saves six in future losses.
3. Full-risk insurance rates for new policies and 18% increases for subsidized policies incentivize preventative measures.
Taxpayer Savings:
1. $3.5 billion of NFIP Revenue available to pay for the total cost of flooding.
2. Policyholders contribute through NFIP premiums, sharing responsibility.
3. Insurance fund reduces federal disaster aid that is 100% paid by taxpayers.

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Top Ten Reasons for the National Flood Insurance Program (NFIP)

1

Insurance Coverage

NFIP provides $1.2 trillion in flood insurance to ~5 million policyholders in 22,000 communities nationwide. Without it, property owners will rely on disaster aid—all at taxpayer expense.

2

Economic Benefit

Offers insurance required for a half million home sales, which is not available in the private market. Creates 1 million jobs and injects $63 billion of income into the U.S. economy.

3

Taxpayer Savings

Reduces the need for federal disaster aid by providing a pre-funded way to recover from floods. Policyholders contribute through insurance premiums, sharing the fiscal responsibility.

4

Financial Sustainability

Generates $3.5 billion per year in revenue to pay for the total cost of flooding. In catastrophic years when revenue is insufficient, NFIP still contributes $3.5 billion and pays interest on any Treasury loans.

5

Responsible Development

Requires local governments to map floodplains and regulate building, making homes and communities safer. Every $1 spent saves $6 in future flood losses.

6

State & Local Control

Administered by local governments, not FEMA, because they know their flood risks best, can regulate building, and can tailor NFIP programs to local needs.

7

Risk Reduction

Promotes floodplain management, mapping, and mitigation efforts, reducing the overall risk and impact of flooding. Risk-based insurance rates incentivize property owners to take preventive measures.

8

Personal Responsibility

Charges full-risk rates for new policies and 18% annual increases for existing policies so property owners have “skin in the game” and bear more of the cost for riskier decisions.

9

Disaster Recovery

Provides $250,000 in building replacement coverage to help homeowners recover quickly from flooding. Versus FEMA aid averaging $4,000 and SBA loans that must be repaid with interest and the mortgage.

10

Community Stability

By providing financial protection against flood damage, NFIP helps stabilize local economies and communities after flood event.