Flood Insurance Reform: A Chance For Congress To Do Something Productive

At a time when 80 percent of Americans believe Congress is doing a poor job, there is an opportunity for lawmakers to take action on an issue that would impact many millions of citizens: flood insurance reform.

And, here’s the amazing part — it’s got major bipartisan support. Like football.

The National Flood Insurance Program (NFIP) within the Federal Emergency Management Agency (FEMA) makes flood insurance available to coastal and inland property owners for homes and buildings that are mapped in areas of flood risk. It’s a critical service.

Unfortunately, the Program in its current form is fatally flawed. It actually encourages increased risks to people, property and nature.


This flaw is due in large part to subsidized flood insurance that pays people to rebuild again and again in areas where floods and hurricanes put communities, first responders and properties at risk.

To make matters worse, development in flood risk areas has the perverse effect of destroying natural systems that would otherwise provide flood and storm protection to people and properties.

Then there’s the fact that the current program does not emphasize “preventative-care” solutions that would greatly reduce the cost of flood damage during extreme events. One recent study estimated that for every dollar spent on flood preparedness, five dollars are saved when disaster strikes.

But, here’s perhaps the biggest problem: in a world of increasing severe and erratic storms and floods, as well as sea level rise, these issues are beginning to have more devastating consequences. In 2011 alone, there were 58 Federal flood disaster declarations, covering 33 different states, costing over $8 billion and causing 113 deaths. Both the costs and the number of deaths exceeded the 30–year averages.

What’s more, in a report commissioned by FEMA, findings indicate that there will be a 40 to 45 percent increase over the next century in U.S. areas susceptible to flooding.

Enter The Flood Insurance Reform and Modernization Act of 2011.

The bill passed the House last summer by a vote of 406–22 and the Senate banking committee unanimously last fall. It needs to pass the full Senate by May 31st, before the flood insurance program is scheduled to sunset altogether.


Last week, I testified before the Senate banking committee on why The Nature Conservancy — and the diverse Smarter Safer coalition, of which we are a member — supports the legislation, with a focus on fixing the fatal flaw of the current Program.

The bill will eliminate subsidized rates, allow rates to be adjusted to reflect true risk, and take into account future impacts from increased storms and floods. Currently there are 1.2 million properties (20% of the Program) that are charged premiums well below the value of the insured liability.

This pricing fix works in tandem with the bill’s increased focus on flood mitigation — the “preventative care” strategies I mentioned earlier.

The traditional approach to flood protection has been to rely on dams and levees to contain floodwaters, and to build sea walls and bulkheads in coastal areas. While this “grey” infrastructure plays an important role in helping to secure our communities, it’s expensive to build and maintain. What’s more, an over-reliance on it in the U.S. in the past hundred years has encouraged extensive land development in areas particularly susceptible to floods and storms — and catastrophic damage when infrastructure fails. And, fail it has. Look no further than Hurricane Katrina.

Instead of relying solely on grey infrastructure, the bill will make it easier for flood insurance grant programs to fund oftentimes cheaper and more flexible “green infrastructure” solutions — such as restoring coastal wetlands, oyster reefs, and barrier beaches, as well as restoring river connectivity and restoring forests to ensure sufficient floodplain areas.

The reality is, we’ll need both green and grey solutions. But, right now, most planners don’t think beyond the grey stuff.


And, natural systems give us benefits we can’t get from a wall or levee, such as cleaner water, protection against erosion, more recreation opportunities, and food (bringing back fish and shellfish populations, and maintaining agricultural production).

It’s good policy, and it’s a hit on both sides of the aisle. Time for the Senate to take it to the finish line.

For folks interested in showing support for the legislation, check out our Use Your Outside Voice site.

Sarah Murdock is a senior policy advisor at The Nature Conservancy.