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The History of the Federal Flood Insurance Program
The History of the Federal Flood Insurance Program

National Flood insurance Act
The National Flood insurance Act was passed in 1968. The act was passed due to the simple fact that of two sizeable findings. the first selecting stated that the public interest in flood protection is often executed by providing protection versus losses as the result of floods and by minimizing property exposure to flooding. the 2nd selecting stated that the flood insurance program should be tied to a program for that administration of floodplains.

During the 1960s the federal government started to study and estimate the total of communities that have some type of risk linked to flooding. A nearer look at this worry led to the determination that appreciably more communities than have been previously believed have been exposed to flood risk. Today, there are appreciably more than 20,000 communities and areas that have acquire to the National Flood insurance Program.

Hurricanes are one out of your most frequent prospects to of flooding in a large number of areas together at the East and Gulf coasts. Hurricanes can direct to billions of us dollars in damages, as was the situation with Hurricane Agnes in 1972. When the hurricane struck, absolutely few of properties and property have been insured for losses due to flooding. This hurricane together while using damage that it brought on led to the importance for incentives for individuals and businesses to select flood insurance.

Individuals and businesses have been not getting flood insurance in your belief that the disaster would not come about where they live. This led the federal government to pass the Flood Disaster Protection Act of 1973 (see Resources). This act led to a mandatory select requirement for flood insurance. If a home or creating was situated inside a floodplain, a home owner loan lender or financial institution was necessary to have the borrower select flood insurance.

Taxpayer Support
Since the era out of your National Flood insurance Program, taxpayer us dollars have been necessary to operate the program and pay out claims. This changed in 1981 in the presidency of Ronald Regan, together while using program’s goal was to come to be self-supporting by 1988. This led to improvements in your flood program, together the lines of limiting the subsidies for older buildings, raising costs and getting purge of some coverage for basements. As a result, the National Flood insurance Program grew to become completely self-supporting in 1985.