Who sets the flood insurance coverages and premium rates, and are they the same regardless of which insurer issues the policy?

Who sets the flood insurance coverages and premium rates, and are they the same regardless of which insurer issues the policy?

• A. The insurer sets them; rates vary by insurer
• B. FEMA sets them; they are identical regardless of the issuing insurer
• C. The state administers them; differ by insurer
• D. The community sets them; differ by insurer

Answer: (B)

Flood insurance under the NFIP is administered by FEMA. They establish the coverages and the premium rates using standardized rating schedules. Because those rates are uniform nationwide, the premium is the same no matter which participating insurer issues the policy. The insurer acts as the seller and administrator of the policy but does not set the rates. The choices that attribute setting or rate differences to the state, community, or the insurer are not applicable to NFIP flood coverage.

Flood insurance under the NFIP is administered by FEMA. They establish the coverages and the premium rates using standardized rating schedules. Because those rates are uniform nationwide, the premium is the same no matter which participating insurer issues the policy. The insurer acts as the seller and administrator of the policy but does not set the rates. The choices that attribute setting or rate differences to the state, community, or the insurer are not applicable to NFIP flood coverage.