Flooding is the most common natural disaster across the nation — insurance is making it worse

For 50 years, the National Flood Insurance Program has subsidized risky development in floodplains. This has put people in harm’s way and run up more than $36 billion in debt. Congress must reform the program before the damage is irreversible.

The National Flood Insurance Program (NFIP) is a federally subsidized program that provides flood insurance to 5.2 million property owners nationwide and is typically required to secure a construction loan in a flood risk area. But rather than guiding development away from sensitive floodplains, the program has had the opposite effect — subsidizing and effectively encouraging development in risky and ecologically sensitive areas.

{mosads}Too often natural floodplains are viewed as prime locations to build houses because of their access to waterways; however, many of these areas are also the most prone to flooding and storm damage. Natural floodplains provide a wide land surface where floodwaters can collect and soak into the ground, providing a buffer for ground further inland. They also provide other important value to people and wildlife, including providing habitat for fish or other riparian species, providing a buffer for storms’ impacts and filtering pollutants.

When developments are built in floodplains, these benefits are quite literally paved over, harming communities and the environment. Construction in floodplains increases the risk of devastating floods, inflates taxpayer costs, and degrades habitat and water quality, but often occurs to satisfy the growing demand for more housing.

After a study conducted by the National Marine Fisheries Service in 2008, FEMA was required to make specific changes to the NFIP to prevent further development in floodplains. The common-sense changes included updating floodplain maps, improving the habitat value of levees, and requiring stronger minimum floodplain protections to qualify for flood insurance. But in 2009, FEMA released a policy statement announcing they would no longer require or enforce these practical guidelines.

Congress now has the golden opportunity to better protect the public from devastating floods and safeguard floodplain habitat by reforming the broken NFIP before it expires July 31 — at the height of hurricane season. Reforms should include updating antiquated flood maps, increasing protection and restoration of floodplain areas, moving toward risk-based rates and allowing private insurers to participate in the flood insurance marketplace, and investing in mitigation efforts to reduce the devastating costs of major floods.

Current flood maps are outdated and do not warn property owners of actual risk. By using modern technologies to update flood maps, NFIP would be able to charge risk-based rates and make sure homeowners in floodplains can properly mitigate property before a storm hits. Updated flood maps could also help deter further development in already-vulnerable floodplains, helping to keep our environment resilient.

Congress should reform the program to allow consumers choice by enabling private sector competition in the flood insurance marketplace. The NFIP has accumulated $36 billion in debt, and allowing private sector competition could help take the burden off the backs of taxpayers. For some consumers, the one-size-fits-all NFIP does not provide affordable options that private insurers could offer, possibly with lower premiums. A recent Milliman study found that 60 to 80 percent of homeowners in the Gulf states could see a reduction in premiums with private flood insurance. 

The NFIP must be reformed to incentivize mitigation efforts to better prepare communities nationwide before a disaster strikes, rather than paying for recovery after the fact. By restoring natural features — like coastal dunes and wetlands — and investing in community-wide mitigation, the NFIP can lessen premium costs, reduce flood risk, and better protect the environment. A recent study also found that every $1 invested in mitigation saves taxpayers and the federal government $6 in disaster recovery, safeguarding the program for future years.

Flooding is the most common natural disaster across the nation and Congress has the power to lessen the post-storm devastation by reforming the NFIP once and for all to protect our environment for future generations.

Collin O’Mara is president and CEO of the National Wildlife Federation, America’s largest conservation organization — uniting all Americans to ensure wildlife thrive in a rapidly-changing world.