Smarter, Safer Flood Insurance in a Warmer, Riskier Climate


Scientists at Rutgers University recently published a startling projection about sea level rise for anyone considering buying or rebuilding on the Jersey Shore. In the time it would take a homeowner to pay off a 30-year mortgage, sea levels on the Shore would rise by a full foot, greatly increasing the risk of flood damage. And by 2050, damaging storms more powerful than any in the history of Atlantic City would become a recurring feature every decade.

As our climate warms, flooding along our coastlines and rivers is one of the biggest challenges we face. The Federal Emergency Management Agency (FEMA) recently predicted that areas at risk of flooding in the United States would increase 45 percent by 2100. We need to be better prepared to face this risk, which threatens our communities, our economy and our environment. That’s why NRDC recently joined, a coalition that promotes environmentally responsible, fiscally sound federal policies that will better prepare and protect homeowners from natural disasters, while ensuring that taxpayers do not bear the expense of putting people in harm’s way. One of the disaster policies the group is taking a close look at is the National Flood Insurance Program (NFIP).

The federal government created the NFIP to encourage property owners in high-risk areas to buy flood insurance, and to help communities better prepare for and avoid damage from flooding. But over the years, by offering below-market prices that didn’t reflect the actual risks of flooding, the program failed to discourage development in floodplains and vulnerable coastal areas.

Flooding near Portage Des Sioux, MO, on the Mississippi River, June 2013. (FEMA News Photo/Steven Zumwalt)

In recent years, the stresses of climate change, combined with unprecedented development in flood-prone areas, have saddled the program with steep costs that have sent it spiraling into insolvency, borrowing money from the Treasury to stay, as it were, afloat. has worked for NFIP reforms that would help send the right signal to homeowners and businesses about the true risks they face from flooding.  In 2012, Congress enacted a series of reforms intended to phase out flood insurance subsidies for vacation homes, properties that have repeatedly flooded, and other high-risk properties. These reforms were intended to help restore the financial stability of the NFIP by bringing insurance rates in line with true flood risks.

But there was a hitch. Some property owners found themselves facing a sudden and dramatic increase in insurance rates—a reflection of risk that had previously been hidden. My colleagues in New York, who are working to help homeowners during post-Hurricane Sandy recovery efforts, are seeing first-hand the difficult choices and hardship these homeowners face. While some are able to handle the rate increases, others are truly stuck. Not only can they not afford the insurance—they can’t afford to raise their homes or relocate. 

In Congress, there’s a move afoot to undo the reforms put in place in 2012, and essentially restore the original, flawed program that subsidized property owners to live in harm’s way. While this would address the issue of affordability of flood insurance, it will not make anyone any safer. We would still effectively be encouraging people to live in areas where the risk of flooding is high, and getting higher. As the climate continues to warm, sea levels rise, and precipitation patterns change, this is not a viable long-term solution.

NRDC joined in order to seek a better solution, one that is fiscally and environmentally responsible and also protects homeowners who cannot afford the insurance and safeguards their homes need in an increasingly risky environment.

A smart solution would gradually phase in rate increases for flood insurance, and offer a safety net for low-income homeowners. To ensure that communities are informed and can take steps to prepare for the risks they face, FEMA needs to update and upgrade its local flood maps; and the government needs to seriously study the issue of affordability. In addition, flood plain buyouts, based on pre-storm fair-market value, could provide financial relief for homeowners whose properties are located in the most dangerous flood zones. These buyouts would also benefit the public, since they convert flood zone buildings into wetlands, dunes and recreational fields that protect the rest of the community from future floods, and save taxpayers from having to fund repeated rebuilding.

We need to develop smarter, safer ways to protect our communities from the ravages of flooding. The NFIP can be a critical tool that helps prepare us for a warmer, more flood-prone world. To be truly effective, the program should reflect the real risks that all communities face, protect homeowners who truly can’t afford insurance, and focus on climate-smart strategies that will reduce the potential harm of the floods yet to come. 

(This post originally appeared as an op-ed in The Hill.)