FEDERAL PROGRAMS · 6 MIN READ

Federal Disaster Programs Beyond the NFIP

The flood program is only one piece of the federal catastrophe framework, and the exam expects you to route each risk to the right program. FAIR plans — Fair Access to Insurance Requirements plans — originated under the Urban Property Protection and Reinsurance Act of 1968, enacted as Title XI of the Housing and Urban Development Act of 1968, which linked federal riot reinsurance to statewide plans assuring access to essential property insurance. The National Flood Insurance Act was a separate title of that same 1968 law. Several hazard programs coordinate research and safety but sell no insurance: the National Earthquake Hazards Reduction Program (NEHRP) produces seismic hazard maps, building-code provisions, and early-warning support through USGS, FEMA, NIST, and NSF; the National Dam Safety Program coordinates federal-state dam safety and inspector training; and the National Levee Safety Program plays the parallel role for levees. Earthquake insurance comes from private carriers and state entities such as the California Earthquake Authority — never from NEHRP — though flooding from a dam failure can still be an NFIP loss because the SFIP flood definition covers overflow of inland waters regardless of cause. After a declared disaster, federal assistance layers on top of insurance under a strict anti-duplication principle rooted in the Stafford Act. SBA disaster home loans cover only uninsured or underinsured losses; if the borrower later collects homeowners or NFIP proceeds for the same damage, those proceeds must be applied to reduce the SBA loan balance, and post-disbursement recoveries must be paid to SBA as principal. FEMA Individual Assistance is likewise reduced by insurance proceeds, and recipients of certain disaster aid may receive a Group Flood Insurance Policy (GFIP) as a condition of assistance. Mitigation money flows through the Hazard Mitigation Grant Program (up to 20 percent of estimated federal disaster assistance for states with an enhanced plan, 15 percent baseline, at 75 percent federal cost share), plus Flood Mitigation Assistance and Pre-Disaster Mitigation grants targeting repetitive-loss properties. Finally, the Coastal Barrier Resources Act of 1982 created the Coastal Barrier Resources System to discourage federally subsidized development on undeveloped coastal barriers. Structures newly built or substantially improved after a unit's designation date are statutorily barred from NFIP coverage and most federal financial assistance; pre-designation structures may keep coverage. Growing crops are never NFIP property — qualifying crop risks belong to USDA's Risk Management Agency federal crop insurance program.