NFIP Insurance, Claims, Rating, and Community Rating System Concepts
Who pays what
Pre-FIRM structures (built before the community's initial FIRM effective date, or before December 31, 1974, whichever is later) were historically subsidized; post-FIRM structures were rated actuarially. Risk Rating 2.0 replaced zone-based rating with property-level variables: flood frequency, distance to water, elevation, building type, and cost to rebuild. HFIAA surcharges ($25 residential primary; $250 for others) apply to most policies.
Coverage and claims
Standard policies cover building and contents, with prescribed limits (regular program: $250,000 residential building, $100,000 contents; $500,000 nonresidential building and contents). A 30-day waiting period applies, with narrow exceptions such as a new loan closing under the mandatory purchase requirement or a map revision. Increased Cost of Compliance provides up to $30,000 per building to elevate, relocate, demolish, or floodproof after a declared-loss repair that qualifies as substantial damage, or a qualifying repetitive loss under the community's ordinance. Claims require a signed proof of loss, generally within 60 days of the loss.
Community Rating System
The CRS is voluntary. The community must be in the Regular Program, fully compliant, and it earns points across four series: public information, mapping and regulations, flood damage reduction, and flood preparedness. Every 500 points advances one class. Class 1 (about 4,500 points) earns a 45% discount on SFHA premiums; Class 9 earns 5%; Class 10 earns nothing.
Traps: ICC is coverage within the standard policy, not a separate product; the CRS discount benefits policyholders, not the community treasury; compliance retrogression or suspension forfeits the class; the waiting period clock starts on application and premium payment.
Rule of thumb: Class 9 = 500 points = 5%; add 500 points and 5% per class up to Class 1 at 4,500 points and 45%.