FEMA Reaching Out To Agents & Communities

BROOKLYN, N.Y.--Few New York insurance agents are aware that community disaster risk mitigation programs can cut premium costs for federal flood insurance, judging by a meeting here yesterday with a Federal Emergency Management Agency official.

Their lack of knowledge was revealed during a briefing by Stephen Kempf Jr., regional administrator FEMA Region II, at the Professional Insurance Agents of New York State Inc. annual Metropolitan Regional Awareness Program.

Mr. Kempf discussed the Community Rating System (CRS) program for the mitigation of disaster risk, primarily in his region. He said by following the program a community can reduce its premiums under the National Flood Insurance Program between 5 percent and 40 percent.

When he asked for a show of hands to see how many agents were aware of the program, only a handful among several hundred who were present raised their hands.

Mr. Kempf said in New York, only 27 communities are involved in the program. Of that number, 17 communities qualify as class 9, which equates to a 5 percent reduction. Nine communities fall into class 8, qualifying for a 10 percent reduction, while only one falls into a class 7 for a 15 percent reduction. No community is below class 7.

With many communities standing to benefit if they join the program, Mr. Kempf said his mission is to increase awareness.

The CRS program, he noted, has been in existence since 1992 and is "a carrot and stick approach" to risk mitigation.

Explaining the effort needed to secure NFIP premium reduction, Mr. Kemp said a 5 percent discount can start with local governments simply handing out brochures and displaying flood mitigation information on municipal event boards.

Higher deductions occur when a community takes greater steps to mitigate risk, such as a municipality's elimination of homes in a flood plain by purchasing them with the aid of FEMA and returning the area to its natural state.

"New York is not unique on the classifications for this region," he noted. "It is more typical of this region."

"We want to enlist people's interest and get them involved," he said, underscoring that a partnership between FEMA and both business and local governments is essential to mitigating risk.

In addition to bringing awareness of the benefits of disaster risk mitigation, he said FEMA in general is seeking to educate agents and the public about its mission. He told his audience that his department is reaching out to educate the public about what it is legally bound to do and the limits of its mandate.

FEMA's work is a two-prong approach, he said. The first is to assess and prepare for disasters by partnering with local emergency services agencies in developing responses to disaster and understanding the gaps in that response. The second is to mitigate the future impact of disasters, something he said scant attention is being paid to in some places.

"FEMA is not an insurance agency, but it is here to help people to get back on their feet," said Mr. Kempf, adding that the agency is limited by law to provide no more than $28,500 to an individual for food and shelter until their insurance kicks in and they get back on the road to recovery.

During a later interview, Mr. Kempf told National Underwriter that his efforts and those by other administrators to get their message to industry and community leaders has taken on a new emphasis under the direction of Director David Paulison.

He said the aim among the regions is to make communities better informed about risk and to reduce losses. In the case of the Northeast, the dominant risk is flood, but the emphasis on risk mitigation differs by region and the dominate risk exposure.