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Transcript: 50 years of the National Flood Insurance Program Podcast[Mark Peterson] I'm Mark Peterson and this is the FEMA Podcast with an agency update for August 1st, 2018. The National Flood Insurance Act turns 50 years old today. August 1st marks the 50th anniversary of the National Flood Insurance Act, the guiding legislation for the National Flood Insurance Program. David Maurstad, serves as the Federal Emergency Management Agency’s, chief executive for the National Flood Insurance Program where he leads the delivery of the agency's risk management and risk reduction directorates. The Agency’s National Flood Insurance Program, referred to as the NFIP, provides flood insurance coverage to millions of households and small businesses across the nation. We caught up with David Maurstad, on the Mall of the U.S. Capitol to talk about the history and the future of the program. David, as we mark the 50th anniversary of the National Flood Insurance Program, can you give us a little history about how the program started? [David Maurstad] Well, the program was created with the National Flood Insurance Act, August 1st, 1968. But actually the program was in the making, going clear back to the 1927 Midwest floods, which were probably the largest flood disaster in the history of our nation. And then in each decade and the thirties, forties, and fifties, various administrative proposals, various legislative proposals would surface to determine how we were going to manage the flood risk of the nation. In 1965, Hurricane Betsy kind of put the dot on the exclamation point to say, “Hey, we've been talking about this for a long time. Let's put in place a program that includes private sector support that involves participation by the communities and addresses the nation's flood risk for individuals and businesses.” [Mark Peterson] So David, you've worked in the National Flood Insurance Program in a number of different positions. What does the program mean to you? [David Maurstad] Well, the 50th anniversary is a time for us to reflect on a public policy program that's been delivering for the nation for the last five decades, is now in over 22,000 communities, provides a floodplain management and building code, a protection in those communities that agree to participate in the program and is offering flood insurance protection for over 5 million policy holders, which means we have 5 million individuals that have flood disaster strikes them regardless of whether it's a presidentially declared disaster or a localized regional flooding event. They have the means by which to get back on their feet, which makes them more resilient and their communities more resilient. So at this juncture, we're able to look back and say, this program has as great value to the nation. And, I also think about all the people that have made this program work over the years, the public service of those individuals that are federal employees and also the tremendous private sector support that this program depends upon and how it's delivered to the American public. [Mark Peterson] Can you talk a little bit about how the private sector is involved in the program? [David Maurstad] Well, this from the very beginning of the program, has been a very strong public private partnership. The way that it currently operates, we rely on 63 of the leading property insurance companies in the nation to administer the program on our behalf. In addition to those 63 companies, we also have a handful of vendors that support those companies and also support our NFIP direct program which, policyholders can access if they don't have a relationship with one of the 63 companies. So in the 22,000 communities that participate in the program, every property owner in those communities can access the program through NFIP direct with the WYO companies and the WYO companies are supported by their agency staff, thousands of insurance agents across the country that actually sell and advise our product with their customers, our customers and policyholders. Then you have the independent adjusters, the adjusting community that's out there at the time of a disaster at the time of a claim, helping the policy holder through that claims journey. So there are literally thousands of adjusters out there. So the public private partnership is unique in that you have large company support and then you have a lot of small business support throughout the nation supporting our program and it's actually one of the strengths of the program. [Mark Peterson] The National Flood Insurance Program is so much more than just selling insurance. It's really about managing the nation's risk. What are some of the accomplishments of the NFIP over the last 50 years? [David Maurstad] Well, for the first time we've been able to identify what the flood risk is because of the national flood insurance program. There's been over a million miles of coastal and riverine flood risk that's been mapped for the nation. In the 22,000 communities that participate in the program, any new construction is at the minimum federal standard or higher in the high risk flood area, which results in a little under $2,000,000,000 of avoided losses every year. So the flood risk component of this, the mapping component of this both provide information to communities and individuals by which they can then take actions to minimize their risk and become more resilient if a disaster were to strike for their particular area. [Mark Peterson] So how can individuals, communities, and businesses do more to manage their flood risk? [David Maurstad] Well, first of all, they don't want to look at it as just one action. They need to look at what mitigation activities do we need to be involved in and then how do we work the insurance component into that. And so for individuals, it's know your risk no where you are. Are you susceptible to a hurricane flooding? Are you susceptible to urban flooding? Are you susceptible to riverine flooding? But what's my individual flood risk? And then once I identify that, am I in the high risk area or am I in the medium, the low risk area, then are there steps I can take to minimize that risk? Can I flood proof in some way and I raise utilities so they're less likely to be flooded and damaged? And then after I take those actions, then okay, I got to contact my insurance agent and talk about my homeowner's insurance, what kind of homeowner's insurance do I have, what kind of flood insurance coverage should I have? And then make sure that when the discussion comes out of whether you're required to have it or whether you need it, you decide to go with, I need this and so I, I go ahead and take the next step and buy the insurance coverage. I just don't get informed about it. At the community level, it’s “Okay, how do we best develop in our community? What type of community and how resilient do we want to be? Maybe we don't zone a particular area for residential or commercial use because it's more susceptible to flooding.” But then in those areas that that are in the high risk area, making sure that at the community level we have a enforcement process in place where we can make sure that the building that's going on through the permitting process at the local level is happening at the minimum federal standard and above so that that new construction is going to be stronger and more resilient than the instruction or the built infrastructure already is. So the program was really designed to address future building and whatnot and then provide the insurance when we can't or not able to mitigate completely. [Mark Peterson] So over 50 years, the National Flood Insurance Program has supported disaster survivors in numerous disasters around the country. What does it mean to the disaster survivor who has insurance versus someone who does not have insurance? [David Maurstad] Well, 75 percent of the declared disasters that FEMA supports are flood related disasters and then you have numerous regional flooding events that are occurring virtually all the time throughout the country that don't necessarily rise to the level of a presidentially declared disaster. And in every one of those, we unfortunately find that there are too many disaster survivors that don't have the necessary insurance protection. We're dedicated to closing that insurance gap because the insurance survivor has a path forward. They have the proceeds to get back on their feet, to start the rebuilding. The uninsured survivor has to rely on limited disaster assistance or the voluntary a community to assist them in some way or another, and it's a very different path, very uncertain path, and so this is really about more people needing the right insurance coverage, closing the insurance gap, and in in our program area, that means more people with a flood insurance policy, because that means less disaster suffering. If we can have more people with an insurance policy that has taken the necessary steps before the disaster, then the community responds quicker. The individuals have a whole a brighter path forward, and that's what we're focused on. How can we make sure we have less disaster suffering? And one of the key ways is our administrator has said his insurance is the first line of defense. So we want people to have a flood insurance policy. [Mark Peterson] The National Flood Insurance Program is the largest single peril insurance operation in the world and right now it is in the process of reauthorization and some have said that the program is complex both for the communities that we serve, but also for the policy holders. So where should the program be in the future? [David Maurstad] Well, as we look back on the, on the legacy of the last 50 years, and as you indicated as, as a, as a world class operation, which we strive to be, we're always about continuous improvement. How can the program better serve the nation? So we're looking at doing things like developing a new suite of insurance products to modernize the actual insurance policy that our consumer, that we're asking our consumer and our policy holders to purchase and our agents to sell in our adjusters. To adjust from, so we're simplifying, making it less complex, the actual insurance policy. We're also looking at the way we rate the insurance premium, how we go about calculating what's the right amount for you to pay at your property for this policy, and then we're working on the claims experience because at the end of the day and insurance policy is about what happens when I have to call up my agent and say, I've got a possible claim here, and so we're working on the claims experience so people will value and trust the policy that they've purchased. We're also doing things in the mitigation area and the flood plain management area to make sure that those are effective as we move forward and support the insurance operation. As the program was developed and designed.[Mark Peterson] We've linked to this episode on our FEMA Facebook page and we invite you to join the conversation in the comments. If you have ideas for a future topic, send us an email@fema-. If you would like to learn more about this episode or other topics, visit podcast. ................
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