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CBO
PAPER

 
Value of Properties in the
National Flood Insurance Program
June 2007


Cover Graphic


Notes 

All years referred to in this paper are calendar years.

Numbers in the text and the tables may not add up to totals because of rounding.

The cover illustration is an aerial photograph of Pensacola Beach, Florida, July 11, 2005, the day after Hurricane Dennis struck (Remote Sensing Division, National Oceanic and Atmospheric Administration).







                
Preface
The effects of Hurricanes Katrina and Rita have prompted increased interest in policy questions about the National Flood Insurance Program. Some of those questions focus on the program's financial soundness and on the subsidized rates charged on certain policies. This Congressional Budget Office (CBO) paper was written at the request of the Ranking Minority Member of the Senate Budget Committee to address questions about the values of properties covered by flood insurance at subsidized rates. In keeping with CBO's mandate to provide objective analysis, the paper makes no recommendations.
Perry Beider wrote the paper, under the guidance of Joseph Kile and David Moore. The author thanks Thomas Hayes and Dan Spafford of the Federal Emergency Management Agency and Parker Boone of Computer Sciences Corporation for their cooperation in providing data on flood insurance policies. He also thanks James Q. Adams, Reggie Toledo, and their colleagues at Marshall & Swift/Boeckh for their work in matching the policy addresses to data on property values. Robert Dennis, Douglas Hamilton, Arlene Holen, Daniel Hoople, Donald Marron, David Torregrosa, and G. Thomas Woodward of CBO provided helpful comments.
Kate Kelly edited the manuscript, with assistance from John Skeen, and Leah Mazade proofread it. Maureen Costantino designed the cover and prepared the report for publication, with assistance from Allan Keaton. Lenny Skutnik produced the printed copies, Linda Schimmel coordinated the print distribution, and Simone Thomas prepared the electronic version for CBO's Web site.

Peter R. Orszag
Director
June 2007




CONTENTS


Summary and Introduction

NFIP Policies and Pricing

Findings

Insured Properties Versus Properties Nationwide

Properties with Insurance: Coastal Versus Inland

Subsidized Versus Unsubsidized Properties

Distributions of Property Values

Nonprincipal Residences: Vacation and Rental Properties
 

Tables
1. Median and Average Property Values of Sampled NFIP Properties
2. Average Land and Improvement Values of NFIP Properties
3. Average Value of NFIP Nonprincipal and Principal Single-Family Residences
 
Figures
1. Value Distributions of Sampled NFIP Properties
2. NFIP Properties with Values Exceeding Specified Amounts
3. Subsidized Single-Family Residences with Values Exceeding Specified Amounts
 
Box
1. Data for This Report
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