NFIP Discounts

This page is a rough draft and will need more work before it's finalized.

This page contains details about the NFIP Application and is written for insurance agents. Find more in the How To Write section of the NFIP Flood Insurance Manual.

Policy Guide

Standard Flood Insurance Policy

Applications

Equinox Procedure
Waiting Periods : Occupancy Foundations : Discounts

New Business

Elevation Certificates
Primary Residence
BRCV : Venting : Condos

Renewals

Equinox Procedure
Billing Changes

Changes

Equinox Procedures
Mortgagee : Insured
Transfer of Ownership
Coverage Limits

Cancellations

Equinox Procedure
Request Forms : Signatures
Reasons : Documents

NFIP Discount Types

The NFIP offers three main types of premium discounts to encourage participation in flood insurance and promote mitigation efforts:

Statutory Discounts

• What They Are: Mandated by law to encourage community and property owner participation in the NFIP.
• Eligible Properties:
  • Pre-FIRM buildings (constructed before the community's initial Flood Insurance Rate Map).
  • Buildings located in certain zones with specific characteristics (e.g., AR or A99 zones).
  • 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.
• Important Notes:
  • A lapse in coverage may result in the loss of eligibility.
  • Only the most beneficial statutory discount applies if multiple are available.

Mitigation Discounts

• What They Are: Incentives for policyholders who implement flood risk-reduction measures.
• Examples of Mitigation Actions:
  • Elevating machinery and equipment (e.g., furnaces, HVAC systems) above the base flood elevation.
  • Installing proper flood openings (vents) in enclosures to minimize hydrostatic pressure and reduce damage.
• How They Apply: Discounts are granted based on specific mitigation measures, verified through documentation such as elevation certificates or photos.

Community Rating System (CRS) Discounts

• What They Are: Offered to policyholders in communities that exceed minimum floodplain management standards.
• How It Works:
  • 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:
  • 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.