Flood Insurance: Policy Issue

Overview

Floods are the most common natural disaster in the U.S. Authorized by Congress, the National Flood Insurance Program (NFIP) is a critical tool for the rental industry to mitigate some of the financial risk posed by these tragedies. Under existing law, rental housing in high-risk flood areas with federally regulated and insured mortgages must purchase flood insurance.   

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Industry Position

Since federal law requires apartment owners with federally-backed mortgages to purchase flood insurance, the National Apartment Association (NAA), alongside our partner the National Multifamily Housing Council (NMHC), supports the long-term reauthorization of the NFIP to prevent market disruption and support program reforms that will decrease flood risk for apartment communities. 

As an Owner or Operator, How Does this Affect My Business?

The NFIP is especially important because there is largely no readily available private flood insurance market for most property owners. The NFIP ensures that affordable flood insurance is available in all market conditions for every at-risk rental property. 

These include more than just high-rise rental housing properties in urban or coastal areas. The NFIP insures apartments of all sizes and types, across every state in the nation. Retaining access to affordable, quality flood insurance through the NFIP is a top priority for the rental housing industry as it seeks to not only protect property investments but also maintain housing affordability given the nation’s current shortage. 

Contact Information

To learn more about this issue, please contact NAA's Public Policy team.

For more information:

Flood Insurance Fact Sheet

Congress should provide a long-term reauthorization of the program to create market certainty that allows the rental housing industry to meet soaring rental housing demand. The reauthorization effort should include the following sensible reforms for commercial and rental property owners: 

  • Permit additional flexibility for apartment owners to secure coverage in the private flood insurance market instead of being bound by the limitations of the NFIP. Then assure that such private coverage be considered “continuous” if the property owner reverts to the NFIP for purposes of rate setting; 

  • Expand the NFIP to include Business Interruption coverage for rental properties; 

  • Allow for NFIP umbrella coverage for owners who own several rental housing properties or garden style communities; 

  • Provide Replacement Cost Value (RCV) instead of Actual Cost Value (ACV) to damaged apartment properties; and 

  • Increase access to existing FEMA flood mitigation funding and programs for apartment communities.