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Tuesday, April 26, 2016

Repetitive Loss properties and the National Flood Insurance Program


Repetitive loss property is any insurable building for which two or more claims of more than $1,000 were paid by the National Flood Insurance Program (NFIP) within any rolling ten-year period. Currently there are over 122,000 RL properties nationwide.


Repetitive losses are the biggest drain on the FEMA Insurance program. FEMA has paid billions of dollars in claims for RL properties.  RL properties not only increase the NFIP’s annual losses and the need for borrowing; but they drain funds needed to prepare for catastrophic events. 


Community leaders and residents are also concerned with the RL problem because residents' lives are disrupted and may be threatened by the continual flooding.


The primary objective of the RL properties strategy is to eliminate or reduce the damage to property and the disruption to life caused by repeated flooding of the same properties.


Over the years, there have been a number of efforts aimed at addressing repetitive losses.  Federal, State and local flood control and storm-water management projects have been aimed at reducing the risks.  The FEMA post-disaster Hazard Mitigation Grant Program (HMGP) projects have mitigated nearly 3,000 RL properties.  In 1994, the National Flood Insurance Reform Act authorized the Flood Mitigation Assistance (FMA) Program and a new insurance coverage called Increased Cost of Compliance, or “ICC.” 


The Special Direct Facility (SDF) was established in an effort to closely supervise the issuance of policies and the claims process for NFIP policies in force on TGRL properties.  NFIP policies on Target Group properties are rated and adjusted in the same manner as non-Target Group policies but are monitored at the SDF. 


Flood insurance premiums will not increase merely because a property is on the RL list.  However, if an offer to mitigate is made and the owner refuses the offer, the premium will increase 150 percent of the chargeable rate for the property at the time that the offer was made, as adjusted by any other premium adjustments otherwise applicable to the property.  Increases may continue with each claim but will not exceed the actuarial rate for the property. 


When documentation is received that verifies acceptable mitigation of an RL structure the record, the record becomes a mitigated RL property and, although it remains as part of the historical record, it is no longer considered a repetitive loss property.  It will no longer be required to be insured at the SDF, and the policy then will be transferred from the SDF to the WYO Company that previously serviced the policy.


Depending on individual circumstances, appropriate mitigation measures commonly include:

        -elevating buildings above the level of the base flood,

        -demolishing buildings,

        -removing buildings from the Special Flood Hazard Area (SFHA) as part of a flood control project,

        -local drainage-improvement project that meets NFIP standards and removes a property or properties from RL or RLTG status.


Mitigation is the cornerstone of emergency management. It is the ongoing effort to lessen the impact disasters have on people and property.  FEMA currently has three mitigation grant programs: the Hazards Mitigation Grant Program (HGMP), the Pre-Disaster Mitigation program (PDM), and the Flood Mitigation Assistance (FMA) program.  Detailed information on these three programs and other related programs is available on the internet at


Increased Cost of Compliance (ICC) funds for substantially damaged structures covered by flood insurance can also be used to mitigate RL structures.  More
information on ICC is available at

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