NFIP Discounts: Difference between revisions

Latest revision as of 13:58, 18 February 2025

The NFIP offers three categories of premium discounts that have been created to encourage participation, reduce risk, and promote resilience: statutory, mitigation, and CRS.

Statutory Discounts

Federal law provides general guidelines about how the NFIP develops rates and does not specify all the details contained in the Flood Insurance Manual. However, a handful of policy premium requirements are given direct mandates by the US Code.

Although the discounts are identified separately throughout the Code, they are grouped together in the FIM as Statutory discounts. They exist to encourage a property owner's participation in the NFIP.

Statutory discounts are given for the following circumstances.

Pre-FIRM buildings
Buildings that were Newly Mapped into a Special Flood Hazard Area
Emergency Program properties
Properties in areas undergoing the restoration of flood protection systems

Find more details on the Statutory Discounts page.

Mitigation Discounts

The NFIP offers incentives to policyholders who implement flood risk-reduction measures known as Mitigation Discounts. These building improvements reduce flood damage before it happens, which helps policyholders protect their investment and make recovery easier.

Although mitigation is done as a preventative approach for individuals, it strengthens communities by ensuring more buildings are resilient.

Mitigation discounts are given under the following circumstances.

Elevating machinery and equipment above the building's first floor
Installing proper flood openings in enclosures
Floodproofing

Find more details on the NFIP Mitigation Discounts page.

Community Rating System Discounts

Community Rating System (CRS) Discounts apply at the community level, not to individual buildings. Communities that go beyond NFIP minimum requirements—by improving floodplain management, maintaining drainage systems, or providing public flood awareness programs—earn a CRS Class ranking. All NFIP policyholders in that community then receive a discount, regardless of whether they’ve made individual mitigation efforts.

These discounts encourage long-term mitigation, compliance, and community participation, making flood insurance more affordable while promoting risk-reduction strategies.

This page contains information about the NFIP. Find more NFIP Resources.

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 {{info-nfip-sfip}}
-The [[NFIP]] offers three main types of premium discounts to encourage participation in flood insurance and promote mitigation efforts: statutory, mitigation, and CRS.
+The [[NFIP]] offers three categories of premium discounts that have been created to encourage participation, reduce risk, and promote resilience: '''statutory''', '''mitigation''', and '''CRS'''.
 == Statutory Discounts ==
-'''What They Are''': [[Statutory discounts]] are mandated by law to encourage community and property owner participation in the NFIP.
+Federal law provides general guidelines about how the [[NFIP]] develops rates and does not specify all the details contained in the ''[[Flood Insurance Manual]]''. However, a handful of policy premium requirements are given direct mandates by the [https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter50&edition=prelim US Code].
-'''Eligible Properties''':
+Although the discounts are identified separately throughout the Code, they are grouped together in the ''FIM'' as '''Statutory discounts'''. They exist to encourage a property owner's participation in the NFIP.
-* [[Pre-FIRM]] buildings (constructed before the community's initial Flood Insurance Rate Map).
-* Buildings that were [[Newly Mapped]] into a [[Special Flood Hazard Area]] from a Non-Special Flood Hazard Area.
-* [[Emergency Program]] properties.
-'''Phasing Out/Glide Path''': These discounts gradually reduce through annual caps on premium increases until the policy reaches its full-risk rate.
+Statutory discounts are given for the following circumstances.
-* A lapse in coverage may result in the loss of eligibility.
+* [[FIRM Date#Pre-FIRM|Pre-FIRM buildings]]
-* Only the most beneficial statutory discount applies if multiple are available.
+* Buildings that were [[NFIP Newly Mapped Eligibility|Newly Mapped]] into a [[Special Flood Hazard Area]]
+* [[Community Participation#Emergency Program|Emergency Program properties]]
+* Properties in areas undergoing the restoration of flood protection systems
+{{feedback
+| title =
+| attn = ''Find more details on the '''[[Statutory Discounts]]''' page.''
+| category =
+}}
 == Mitigation Discounts ==
-'''What They Are''': [[Mitigation discounts]] are incentives for policyholders who implement flood risk-reduction measures, recorded on the application or applied through policy changes.
+The NFIP offers incentives to policyholders who implement flood risk-reduction measures known as '''Mitigation Discounts'''. These building improvements reduce flood damage before it happens, which helps policyholders protect their investment and make recovery easier.
+Although mitigation is done as a preventative approach for individuals, it strengthens communities by ensuring more buildings are resilient.
-'''NFIP Mitigation Actions''':
+Mitigation discounts are given under the following circumstances.
-* [[Machinery and Equipment|Elevating machinery and equipment]] (e.g., furnaces, HVAC systems) above the building's first floor.
+* [[Machinery and Equipment|Elevating machinery and equipment]] above the building's first floor
-* Installing [[NFIP Proper Openings|proper flood openings]] (vents) in enclosures to minimize hydrostatic pressure and reduce damage.
+* Installing [[NFIP Proper Openings|proper flood openings]] in enclosures
 * [[Floodproofing]]
-==  Community Rating System (CRS) Discounts ==
+{{feedback
+| title =
+| attn = ''Find more details on the '''[[NFIP Mitigation Discounts]]''' page.''
+| category =
+}}
-'''What They Are''': [[CRS Discounts]] are offered to policyholders in communities that exceed minimum floodplain management standards.
+==  Community Rating System Discounts ==
-'''How It Works''':
+[[Community Rating System|Community Rating System (CRS) Discounts]] apply at the community level, not to individual buildings. Communities that go beyond NFIP minimum requirements—by improving floodplain management, maintaining drainage systems, or providing public flood awareness programs—earn a CRS Class ranking. All NFIP policyholders in that community then receive a discount, regardless of whether they’ve made individual mitigation efforts.
-* Communities earn credit points for activities such as public education, flood mapping, and preparedness efforts.
-* These points determine the community's CRS class (1–10), with Class 1 providing the highest discount (up to 45%).
-'''Eligibility''':
+These discounts encourage long-term mitigation, compliance, and community participation, making flood insurance more affordable while promoting risk-reduction strategies.
-* Applies uniformly across eligible properties within the community.
-* Ineligible for properties with significant floodplain violations or non-compliance with community regulations.
-These discounts encourage long-term mitigation, compliance, and community participation, making flood insurance more affordable while promoting risk-reduction strategies.
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