Memory Aid for Issues & Barriers, Solutions, & Effects
So I came up with this mnemonic when I was very bored and getting overwhelmed with the long lists in this section. Hopefully this helps someone else because it definitely helped me!
Big CRAPS are bad, we would PREFER SMALL!
Issues & Barriers regarding Private Flood Insurance: Big CRAPS
Broad Coverage - must be at least as broad as NFIP coverage
Continuous Coverage Requirement - coverage must be continuous to retain NFIP premium subsidies, switching to private may constitute a lapse
Regulatory Uncertainty
Accurate Assessment of Flood Risk - don't have credible data
Participation Rates - low, not easy to manage & diversify portfolio
Subsidization by NFIP - can't compete with lower rates due to subsidizing from taxpayers
Solutions: PREFER
Pass federal law stating that private flood insurance counts when assessing continuity
Retain state level authority, it may be better in long-term since it encourages state-specific solutions
Expand types of properties required to purchase flood insurance
Fix wording "at least as broad", more specific "comply with state regulation"
Exclude personally identifiable info from NFIP data & make it public
Reform NFIP rates so that prices match what a private insurer would charge
Effects of Increased Private Sector Involvement: SMALL
State to State variation in consumer protections for private policies (enforced at state level)
More Choices (for consumer, higher limits, expanded coverages)
Adverse Selection (for NFIP)
Lower Prices (at private insurers, not subsidizing)
Less money to NFIP, could result in impairment to flood mapping and floodplain management