NFIP Plans to Strengthen Its Portfolio Protection Program.(National Flood Insurance Program)

Flooding is the most common natural hazard in the U.S., yet the number of policies covered by the National Flood Insurance Program only grows by about 1% a year, according the Federal Emergency Management Agency.

That means for the roughly 500,000 new policies the NFIP brings in each year, about the same number are lost, which has the NFIP asking why so many flood insurance policies are not being renewed. FEMA hopes to improve that record and achieve a 5% annual growth rate in part by strengthening a program that competes with the private sector's force-placed insurance market.

FEMA policy analyst David Thomas told MSN recently that the agency is more concerned about making sure properties in flood hazard areas are insured than it is about who insures the properties. However, he said that FEMA does not currently have a way to track coverage flood coverage from private companies.

"The bottom line is that we are simply trying to improve our net growth rate and we are trying to make sure at-risk properties are protected," Mr. Thomas said.

Reducing attrition from the NFIP program is one way to make sure properties in areas subject to flood risk are covered, he said. He added that FEMA is not saying that the NFIP's coverage is any better or worse than private coverage offered through force-placed policies that lenders often use.

Mr. Thomas said mortgage lenders and servicers can play a role in helping ensure that coverage is widespread. He urged lenders to continue working to make sure that flood hazard determinations are accurate.

There are legitimate reasons for a payoff, the NFIP concedes. Mapping changes, paid-off mortgages, and properties selling for cash mean that there is no requirement for insurance to be required.