Ian and Congressional Failure to Reform Flood Insurance

As Florida begins the long road to recovery from Hurricane Ian, several problems have come to light which Congress could have (at least) partially addressed, had it done its job and reformed the National Flood Insurance Program.

Over the past five years, Congress has kicked the can down the road passing 22 short-term reauthorizations that left the same outdated flood insurance program in place.  That has left many homeowners unable to afford insurance and in many cases unaware of the fact that they even should seek flood insurance coverage.

In Ian’s wake, it’s now more clear than ever that Congress must do its job and pass a meaningful update to the National Flood Insurance Program. For the record it was abundantly clear this needed to be done after Hurricanes Harvey, Irma, and Maria (2017); Florence and Michael (2018), Midwest Floods of 2019, Hurricanes Laura and Delta (2020), Hurricane Ida (2021) and all of the flood disasters of the past five years.

Florida residents are under-insured

In the Florida counties where residents were told to evacuate, just 18.5% of homes have federal flood insurance, according to data provided by the actuarial firm Milliman to the New York Times. Part of the reason more people don’t have coverage is that the price of flood insurance may be out of reach for low-income residents. Unfortunately, FEMA is prohibited from discounting flood insurance premiums based on a person’s income or ability to pay. Only Congress can amend the law and authorize FEMA to fix this problem.  The Biden administration has tried to get Congress to allow FEMA to discount flood insurance coverage for low-income homeowners and renters, but Congress has not acted.

If you’re buying or renting a home in Florida, past flood damages will not be disclosed to you 

Another reason people don’t buy flood insurance, is they don’t know their own home’s flood history. In Florida, when you buy or rent a home, the current owner is not required to tell you if the property has flooded in the past, how often, and whether you’re legally required to purchase flood insurance.

Florida’s hardly alone. The majority of states have either no disclosure requirements or inadequate disclosure requirements, according to NRDC’s Flood Disclosure Scorecard and FEMA.  The homes that flooded in Ian can and will get passed along to the next unsuspecting buyer or renter. For years, groups like NRDC have urged Congress – and individual states - to put in place a national flood risk disclosure requirement. FEMA and the Biden administration have also urged Congress to do so, but Congress has remained stuck in place. Florida’s legislature has also tanked efforts to put flood disclosure requirements in place.

Flood maps are out of date and don’t show future flood risks

In areas impacted by Hurricane Ian, many communities are relying on flood maps that are well over a decade old. Port Charlotte, Florida which was close to the eye-wall of Ian, is using flood maps produced in 2003. These maps are used by every engineer, architect, planner, banker, etc. to guide where and how development takes place. Too often, decisions are made based on outdated maps. Worse, even if your community has brand new FEMA flood maps, these don’t indicate how flood risks will change due to extreme storms or sea level rise, because FEMA doesn’t factor climate impacts into its maps. Without changes in the way flood maps are produced, we are systematically underestimating the risk of flooding in the decades to come. And by failing to capture the true risks, we're also misleading people who believe they don't live in a floodplain and, therefore, don't need to purchase flood insurance. Congress needs to not only require that future conditions be included in these maps but needs to ensure that FEMA has the funding and technical means to incorporate this important information.

For five years, Congress has failed to pass legislation that reforms and reauthorizes the National Flood Insurance Program. Congress has instead passed 22 short-term reauthorizations, the most recent one was about the time Ian was making its second landfall in South Carolina, after ravaging the State of Florida.

Several members of Congress are pushing for flood insurance reform.  Rep. Luria has introduced legislation requiring FEMA to create a Flood Facts system, which would allow property owners to access complete records of past NFIP damage claims on their home.  This information could be passed along to buyers or renters, and the public would also have access to an anonymized version of the data. Rep. Sean Casten’s bill would streamline access to voluntary home buyouts, allowing people to relocate more quickly to higher ground.  Rep. Maxine Waters worked with Ranking Member McHenry to pass a very good reform bill out of the Financial Services Committee in the 116^th Congress, but the committee has not yet marked-up a bill in the 117^th.  Senator Menendez has legislation introduced, which touches on all the issues highlighted above, but the Senate Banking Committee hasn’t passed a flood insurance bill out of committee since 2014! 

While several legislators have developed the essential pieces of a comprehensive reform package, we’re still waiting for these to receive a floor vote…or even a committee vote this session.  As a result, the same deeply flawed program remains in place.

FEMA has the authority to make a number of improvements to the program, as outlined in this blog by my colleague Joel Scata, and it should do so this year. That includes updating land use criteria that have been in place since the 1970s, improving its flood maps and incorporating future flooding risks into those maps.

But when it comes to addressing the cost of insurance, only Congress can fix this. Instead of acting, however, lawmakers have repeatedly kicked the can down the road, leaving millions of people on their own to grapple with the mounting costs of the climate crisis.