Community Flood Resilience Act

The Community Flood Resilience Act seeks to enhance community financial resilience by allowing states and communities to use a portion of federal mitigation grants for innovative insurance solutions. For a five-year period, recipients of Flood Mitigation Assistance (FMA) grants may allocate up to 15 percent of these funds annually to pay premiums for community-based, parametric flood insurance policies . These private-sector parametric policies offer rapid payouts based on objective, predefined trigger conditions, bypassing traditional damage assessments to provide faster financial support to households and small businesses. The bill mandates that communities using these funds report on their efforts to promote National Flood Insurance Program (NFIP) enrollment, educate residents on parametric policy limitations, and encourage flood-risk mitigation. Additionally, FEMA is directed to conduct outreach and allow other grant funds under its authority to be used for these premiums. Parametric policies must include clear disclosures explaining trigger conditions, potential "basis risk" where individual relief may not occur, and how they differ from NFIP coverage. The Administrator of FEMA is also required to submit reports to Congress at regular intervals, analyzing the program's impact on NFIP participation, the effectiveness of payouts, and offering legislative recommendations for its continuation or expansion.