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5 Million Policies, and Growing!More than 5 million NFIP policyholders are now enjoying the financial protection provided by flood insurance coverage. As of May 31, 2006, there were 511,583 more policyholders than there were at the end of 2004. This translates into more than an 8.5-percent rate of growth.Who buys flood insurance and where do they live? According to The National Flood Insurance Program's Market Penetration Rate: Estimates and Policy Implications, published by the RAND Corporation in February 2006, slightly more than half of the single-family homes located in Special Flood Hazard Areas (SFHAs) across the country have flood insurance provided by the NFIP or other insurers. Although approximately one-third of NFIP policies are written for property located outside SFHAs, the RAND study estimates that this represents only 1 percent of market penetration in moderate-risk zones. 
Overall market penetration varies by region, with the Southern and Western states producing approximately
60-percent penetration and the Northeastern and Midwestern states experiencing only 20-percent to 30-percent
penetration (see map). Nearly 60-percent of single-family homes in SFHAs nationwide are located in the
Southern states. However, less than a quarter of the buildings in NFIP communities nationwide are in
the South. |
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Last updated on December 1, 2006
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