Case study

US National Flood Insurance Program's (NFIP) Community Rating System (CRS)

NATURANCE Compendium

Area characterisation:

Freshwater

Objective:

Discount premiums for floodplain preservation

Start/end date:

Financing:

Public

Potential impacts/benefits:

  • 5–45% flood insurance premium discounts for households
  • Financial incentive to preserve floodplains as natural buffers
  • Benefits 1,500+ communities nationwide
  • Reduces flood risk through open space and wetland conservation

Actions:

Voluntary FEMA programme awarding flood-insurance premium discounts of 5-45% for floodplain management, including substantial credit for open-space preservation, wetland habitat and natural shoreline protection.

Organisations:

FEMA, state floodplain management agencies, local community governments

Contacts:

Case study referred by NATURANCE. For more information, please contact: info@naturance.eu.

FEMA's Community Rating System (CRS) is a voluntary incentive programme that recognises and rewards community floodplain management practices exceeding the minimum requirements of the National Flood Insurance Program (NFIP). Over 1,500 communities participate nationwide, earning flood insurance premium discounts of 5% to 45% based on credit points for activities across four categories: public information, mapping and regulations, flood damage reduction, and flood preparedness.
Critically, the CRS awards substantial credit points for open space preservation (Activity 420), where communities preserve floodplains as natural areas free from development. Preserving floodplain open space allows ecosystems to perform natural functions including storing floodwaters, providing habitat, and reducing flood risk. Communities can earn up to nearly 2,000 points for open space preservation alone, with additional credits for deed-restricted parcels, natural shoreline protection, wetland habitat preservation, and low-density zoning in floodplains. This creates a direct financial incentive linking nature-based solutions to reduced insurance costs for property owners.

Sustainable Development Goals:

  • 13. Climate action

  • 11. Sustainable cities and communities

  • 15. Life on land

Publications and reports: