...by the local community or the state take precedence over the minimum regulatory requirements established for flood insurance, and may benefit the community at large through a reduction in NFIP premiums of up to 45%.
The above description of floodplain management was designed as a lead-in to the discussion of its relevance during a Public Assistance (PA) recovery. For a more detailed description, please visit: www.fema.gov.
With the inevitability that floods often hit the same area numerous times, it can be assumed that communities that suffer damages severe enough for a federal disaster declaration are NFIP communities.
When a federal declaration occurs for flooding in an NFIP community, numerous questions regarding what is paid for, and by whom, become a major issue.
The first source of payment is from the NFIP. Commercial structures, which include municipal buildings of all types, can obtain coverage of up to $500,000 for the building and $500,000 for its contents. It is important to remember that if an applicant is in a SFHA and does not carry NFIP, FEMAwill reduce the eligible grant by the amount that could have been received if the applicant had coverage, up to the maximum amounts available as outlined above. In addition to the normal coverage available through NFIP, Increased Cost of Compliance (ICC) coverage, which allows for increased costs due to the enforcement of codes (e.g. floodplain management), is available up to $30,000.
In a perfect world, flood damages would fall within available NFIP coverage amounts. But as events over the past few years have proven, they often do not. This is where FEMA’s PA program steps in.
As discussed in previous issues of Disaster Recovery Today , FEMAwill pay eligible repair/replacement costs, less all applicable credits, to include the aforementioned insurance reductions. The difficult question to answer when the damaged facility is in an SFHA however, is what the eligible repair/replacement costs are.