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   Preventing Flood Damage
 more...>Remodeling & Renovation>Preventing Flood Damage>

Floodproofing Grant Programs & Insurance Coverage

Note: The process of applying for mitigation funding for people affected by Katrina and Rita was vastly different than accessing mitigation funds after more typical floods and hurricanes. This page describes the mitigation programs as they were intended to function.  Also see: Disaster RECOVERY Assistance 

Federal Grants to Communities

MITIGATION PROGRAM INFO
Links to FEMA, SBA

Several communities in Louisiana have participated in federal grant programs for which on-site protection of private property is an eligible activity. These programs fund elevation or relocation of floodprone buildings, purchase of floodprone properties and, for non-residential buildings, dry floodproofing. Drainage improvements also are eligible.

How to apply for FEMA Mitigation Assistance

FEMA Mitigation Program Eligibility chart showing which hazard mitigation activities are eligible for each of of its hazard mitigation grant programs.

Prior to Hurricanes Katrina and Rita, the two primary federal funding sources for flood mitigation were the Hazard Mitigation Grant Program (HMGP) and the Flood Mitigation Assistance (FMA) program. While these programs and three other FEMA mitigation programs continue to be assets for Louisiana, significant flood and wind mitigation is being funded through HUD Community Development Block Grants authorized as post-disaster recovery funds.

For all the Federal programs, non-federal matching funds, when required, may come from the state, community or property owner. All projects must be cost effective and economically justified.

  • HMGP is a post-disaster funding program; funds are available only after the state has received a Presidential disaster declaration for a natural disaster. Applicant communities do not have to be in a declared parish. The maximum size of the mitigation fund is determined using a formula based on the federal share of the disaster costs; bigger disasters generate larger pots of mitigation money for the state.
  • FMA is funded annually by congressional allocation and is distributed among the states in proportion to their number of flood insurance policies and claims.

Pre-Disaster Hazard Mitigation Program (PDM) Through the Disaster Mitigation Act of 2000 (DMA 2000), Congress approved creation of a national Pre-Disaster Hazard Mitigation Grant program to provide a funding mechanism for all hazards and is not dependent on a Presidential disaster declaration. For FY2002, $25 million was appropriated for the new grant program. Approximately $255 million was available for competitive grants, technical assistance and program support for the Fiscal Year 2005 PDM program. PDM funds are available until expended. Congress has been authorizing around $150 million to $200 million per year for this program in recent years. The state hazard mitigation officers make local government officials aware when these funds are available for competitive applications. There is no state allocation; competition is national.

Programs available to Repetitive Loss Properties (RFC and SRL)  Both these programs were created to address the serious negative impact on the National Flood Insurance Program of properties that file repeated claims. Both were authorized in 2004 by amending the National flood Insurance Act (NFIA) of 1968. Implementation took several years. Owners of qualifying properties are notified directly by the NFIP.

  • Repetitive Flood Claims (RFC)   Under RFC, FEMA can make up to $10 million available annually to assist States and communities reduce flood damages to insured properties that have had one or more claims to the National Flood Insurance Program (NFIP). FEMA may contribute up to 100 percent of the total amount approved under the RFC grant award to implement approved activities, if the applicant has demonstrated that the proposed activities can not be funded under the Flood Mitigation Assistance (FMA) program.
  • Severe Repetitive Loss (SRL)   This program has the stated purpose of reducing or eliminating claims under the NFIP through project activities that will result in the greatest savings to the National Flood Insurance Fund (NFIF). The Federal share of project costs can be fron 75% to 90%. The SRL program differs from FEMA’s other mitigation grant programs in that those property owners who decline offers of mitigation assistance will be subject to increases to their insurance premium rates.

GOHSEP delivers HMGP, FMA, RFC and SRL program information to communities through the parish offices of emergency management. Funds go to the local community, which must administer both the funds and the floodproofing projects. Funding decisions are based on FEMA eligibility criteria and state and local priorities as stated in state and local hazard mitigation plans. Those wishing to participate in a mitigation program should contact their parish office of emergency preparedness/management.

The Louisiana Office of Community Development administers Community Development Block Grants(CDBG) from the U.S. Department of Housing and Urban Development (HUD). With the exception of funds provided directly to homeowners under the state's Road Home Program, CDBG funding is being administered by and through local community governments, similar to FEMA mitigation funds. Visit La Division of Administration Office of Community Development Disaster Recovery Unit.

SBA disaster loans to individuals and businesses Individuals and businesses that obtain disaster recovery loans from SBA can increase the loan by 20% to cover work undertaken to prevent damage from a similar disaster.


State Project Grants to Communities

Louisiana has a grant program for flood-mitigation projects. The Statewide Flood Control Program was created in 1982 by the Louisiana legislature; since 1990 it has been funded by revenue from the Transportation Trust Fund. The proposal-selection system favors public works (flood control) projects, but activities similar to those funded by Federal Emergency Management Agency mitigation grants (see Federal mitigation grants, above) are eligible.

The Statewide Flood Control Program office is in the Ports and Flood Control unit of the Louisiana Department of Transportation and Development. Information on this program is sent to mayors and parish presidents each spring.


Increased Cost of Compliance Coverage

Flood insurance provides "Increased Cost of Compliance" coverage as part of every policy except condominium and group policies. ICC is basic coverage, not an optional rider. And, ICC coverage is not a grant.

This coverage pays up to $30,000* toward the cost of making an insured structure compliant with the local flood damage prevention ordinance when compliance is required by the community.

To benefit from this coverage, the following must happen:

  1. You must have flood insurance on the building.
  2. The building must be in an A or V flood insurance rating zone (not B, C or X).
  3. The building must flood and must be substantially damaged by the flood. Substantially damaged means the cost of repairing the building to its pre-flood condition equals or exceeds 50% of its pre-flood market value (not including the value of the lot).
  4. The local floodplain administrator (permit official) must declare the building to be substantially damaged and must enforce the ordinance that requires substantially damaged properties to be brought into compliance. Compliance means the building meets the standards for new construction.
  5. The local government must issue a permit for the flood-protection activity and inspect and certify its completion.

The compliance (elevation or floodproofing) requirement applies to any substantially damaged building, regardless of whether the damage was caused by flood, fire or wind. However, ICC is available only when the damage was caused by flood.

In communities where the flood damage prevention ordinance requires compliance when the substantial damage occurs over two floods (instead of all in one flood), more people qualify for the coverage. But there has been little pressure from citizens for their governments to make this ordinance change.

Consider whether you are likely to qualify for this coverage, and remember that the $30,000* is YOUR money. It can be used as the non-federal match for a federal grant program.

* This coverage limit was originally $15,000, then raised effective May 1, 2000, to $20,000. It was raised again effective May 1, 2003, to $30,000, and is still at that level in 2011, though there is discussion of raising it to $40,000.


Insurance Guides from La Department of Insurance

Last Updated: 10/26/2013 8:38:00 AM
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