National Flood Insurance Program's Market Penetration Rate Estimates and Policy Implications

Flooding is a major source of loss to individuals and businesses in the United States. Private insurers have historically been unable to provide flood insurance at affordable rates, and until the establishment of the National Flood Insurance Program (NFIP) in 1968, the primary recourse for flood victims was government disaster assistance. Congress adopted the NFIP in response to the ongoing unavailability of private insurance and continued increases in federal disaster assistance. The Federal Emergency Management Agency (FEMA), which is part of the U.S. Department of Homeland Security, is currently conducting a major evaluation of the program's goals and performance. This report contributes to that evaluation by developing more reliable estimates of the proportion of single-family homes (SFHs) (excluding condominiums) that have flood insurance (the market penetration rate), identifying factors that determine the market penetration rate, and examining some of the opportunities for, and the potential benefits of, increasing the market penetration rate. This research was sponsored by FEMA through a prime contract with the American Institutes for Research.Dixon, Lloyd is the author of 'National Flood Insurance Program's Market Penetration Rate Estimates and Policy Implications', published 2006 under ISBN 9780833039088 and ISBN 0833039083.