Community Rating System (CRS) Overview

Community Rating System (CRS) Overview


This is an overview of the Community Rating
System, it was developed for communities that participate in the National Flood Insurance
Program and are interested in learning about the CRS. More information is available on
our website at crsresources.org. The Community Rating System is part of the
National Flood Insurance Program which is run by the Federal Emergency Management Agency
or FEMA. The NFIP uses different factors to determine the rates for insurance premiums,
including a building’s flood zone, elevation, date of construction, and the community in
which it’s located. Of the 22,000 communities in the NFIP, and
only 6% have joined the CRS. Though that seems like a small percentage, those communities
actually represent 66% of all flood insurance policies. The idea behind CRS is to reduce the premiums
in communities where there is better floodplain management, with programs and standards that
are above and beyond the minimum requirements of the NFIP. The day-to-day work of the CRS is administered
by the Insurance Services Office. Your ISO Specialist is the primary person you will
work with at the community level if you are interested in joining the program. The program has three goals. The first one
is to reduce flood damage to insurable property. The NFIP insures buildings from flood damage,
so whatever communities can do to reduce the potential for damage, the CRS wants to support
it. The second goal addresses the insurance aspects.
Communities can encourage more people to have a flood insurance policy (so there’s a larger
policy base) and also help with the flood data that is used to rate buildings. The third goal is to have a comprehensive
floodplain management program at the community level including protection for buildings,
but also protection for streets, utilities, and natural floodplain functions. Activities are organized under four general
series of local activities that work toward the three goals of CRS. The first is the public information series
that provides credit for activities such as outreach projects, websites, technical assistance,
and other things that advise people about the flood hazard. The 400 series provides credit for activities
that deal with new development. Credit for mapping the floodplain, for keeping parts
of the floodplain undeveloped, and higher building standards. The 500 series provides credit for what a
community does to reduce losses to development that is already out there—buying out or
elevating flood prone structures, maintaining drainage systems, and comprehensive flood
protection plans. The 600 series is for the emergency manager.
These are activities that can be done before, during, and after a flood to minimize property
damage and loss of life. These four series form the framework for 19
specific activities that get credit. Within those 19 activities are 94 individual elements
where points are provided for what a community does. The total number of points determines your
Class. Every 500 points gets one class improvement. For every class improvement, properties in
the Special Flood Hazard Area get a 5% reduction in premiums. Communities that have less than
500 points, or that do not participate in the CRS, are Class 10 and receive zero flood
insurance discount. There are about 200 Class 9 communities that
receive a 5% insurance premium reduction. More than 450 Class 8 communities receive
a 10% discount. The majority of the communities are class 6 through 9 because those are the
classes that need the fewest points. Communities typically join at a class 9 or
class 8. Over the years, they will improve their programs or document that they are doing
more, and as result, classes improve over time. There are a series of prerequisites to move
to a Class 4, such as having a comprehensive floodplain management plan. Only 11 of the
1273 communities are class 1 through 4. There are six things you need to do or be
doing, before you can join. The first is to be in the National Flood Insurance
Program in the regular phase for at least one year. We’ll need word from the FEMA Regional Office
that your community is in full compliance with the minimum criteria of the NFIP which
is usually determined by a Community Assistance Visit or CAV. CAV’s are conducted for all
NFIP communities regardless of CRS participation. Your community needs to be keeping elevation
data for new construction in the floodplain using the FEMA Elevation Certificate. About two thirds of communities have repetitive
loss properties. You’ll need to map out these properties and see what can be done to reduce
their repetitive flood damage. Your community’s CEO must state that every
community-owned building that is required to have a flood insurance policy has one.
These are usually buildings in the Special Flood Hazard Area that have received federal
grants or assistance. When a Flood Insurance Study is done in a
coastal area, your community must agree that the LiMWA (the Limit of Moderate Wave Action)
will appear on your final Flood Insurance Rate Map. These are the six prerequisites to get into
the program, but they are also required to stay in the program. The cost of joining the CRS varies by community. Your community must designate a point of contact
between FEMA and ISO, and the various community offices that are implementing creditable activities.
Typically, the CRS Coordinator is an extra assignment. The biggest cost is doing good floodplain
management, the things that deserve the credit. You’ll have to maintain records of what you’re
doing and participate in the recertification and the verification visits.
The total cost depends on your community’s level of effort. The number one benefit of the program is that
you will save your residents money. Money that would otherwise go to pay higher
flood insurance premiums can stay in your community to be spent at local businesses.
Your ISO Specialist and your FEMA Regional Office can provide details of those potential
savings in your community. Property owners who pay for protection measures
with stormwater utilities or property taxes may see those fees offset by their individual
savings on their flood insurance. Communities end up with better programs because
they work harder to get more points, and there’s better coordination between departments. CRS provides technical assistance for a variety
of activities, including stormwater management and planning. When public information is one of your activities,
your residents are more aware about flood protection, they are proud of what your community
is doing, and you end up with a constituency for good floodplain management. And finally, there is an incentive to keep
these programs going. When your community hasn’t experienced a major flood for a few
years, there can be pressure from developers to lower floodplain development standards.
Sometimes people forget the importance of good floodplain management and want to eliminate
programs. CRS communities are motivated to maintain these programs because losing the
credits might raise the insurance premiums on the residents. The Biggert-Waters Reform Act of 2012 resulted
in significant changes to the NFIP and has motivated many communities to look at ways
to reduce the cost of flood insurance. Flood insurance premiums are based on several
factors, including what community you’re in, what flood zone you’re in, and how high your
building is. One way you can reduce the cost of flood insurance is to come into the CRS.
Most likely, you’ll start as a class 7, 8, or 9 and see a 5-15% decrease in your premiums. But CRS wants you to think about the big picture.
Think in terms of not only joining for reduced premiums, but joining to do things in your
community that will reduce flood risks and therefore reduce premiums. Your ISO Specialist will help you through
the application process, but it doesn’t happen overnight. We’ll need a letter of interest
from the chief executive officer to the FEMA Region indicating interest and designating
a CRS Coordinator. We’ll need to know that you are doing enough that would give you at
least 500 points. For that, there’s a tool called a “quick check”. After FEMA completes the NFIP CAV, the Specialist
will visit to identify all the activities you’re doing for credit.
The visit might take one to three days. After the visit and the CAV, FEMA headquarters will
assign the new CRS class This entire process can take anywhere from
6 to 24 months. There’s a lot to do and learn about the CRS,
and there may be cases where you’d like a little help. We have a lot of resources to
assist you, but your number one source is your CRS specialist. You can also talk to
your FEMA Regional Office and State NFIP Coordinator. You can talk to other CRS communities by participating
in one of the many CRS Users groups. There are several websites with more information
about the CRS. Floodsmart.gov is a good resource for elected officials, residents, and insurance
agents who need a very basic introduction to the program. FEMA.gov also has general
information about the program and available training. Go to FEMA.gov and then search for “CRS”. More detailed information
including the CRS Manual, application and quick check can be found at CRSResources.org.
Here, you can find information on the individual activities and elements. For training information, including an expanded
introduction to the Community Rating System, visit the training section of our website
at CRSResources.org.

Author: Kennedi Daugherty

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