As days of devastating rain over Houston begins to break, residents will begin returning to their homes to assess the damage wrought by catastrophic flooding. When all is said and done, Hurricane Harvey and its associated flooding may have caused as much as $30 billion in damages for homeowners — a dizzying total made worse by the fact that the federal flood insurance program, meant to offer relief for homeowners in the face of a natural disaster, is itself underwater and facing an uncertain future.
The National Flood Insurance Program — administered by FEMA — is currently roughly $25 billion in debt. That, according to flood experts, is because the program does not charge rates that actually reflect the risk associated with building homes in floodplains. Combine those low premiums with a series of devastating flood events in recent years, throw in the fact that flood insurance goes more toward rebuilding in flood-prone areas than helping people move to safer regions, and you’ve got a recipe for disaster aid that, itself, is a disaster.
“What’s happening around Hurricane Harvey, it just exposes all of the open sores that cover the flood insurance program,” Rob Moore, a senior policy analyst with the Natural Resources Defense Council’s Water Program, told ThinkProgress.
More than five million homeowners currently have policies through the National Flood Insurance Program, though those policies hardly account for every single residence and building located within a flood-prone area. Under the current iteration of the program, flood insurance is mandatory — required by banks in order to get a mortgage — for homes in flood hazard areas, which are determined by FEMA through the agency’s flood maps. Because the program is newer than many mortgages and because only financed houses even require the insurance, only about 50 percent of all homes located FEMA’s flood hazard areas actually have flood insurance. According to the Washington Post, only 17 percent of homes in the counties most impacted by this week’s flooding have flood insurance policies, which cover up to $250,000 in rebuilding costs for homes and $100,000 for damaged belongings.
“The fact of the matter is, the program has never achieved what insurance companies would call ‘market penetration,’ even in the most vulnerable areas to flooding,” Moore said.
But the availability of flood insurance is hardly the most complicating factor plaguing the program, according to Moore. Far more concerning is the fact that for every $100 of federal flood insurance money spent to rebuild homes damaged by floods, less than $2 is used to help people relocate themselves away from flood-prone areas. Properties that flood time and again — and are rebuilt time and again using federal flood insurance funds — are known as “severe repetitive loss properties,” and more than half of them are located in Houston. For Houston residents that want to relocate after the flood waters recede, there is concern that property values in flood-prone areas would be so low that they wouldn’t be able to buy a comparable home in a safe neighborhood without some kind of financial help — in other words, for the homeowner, it is cheaper to rebuild than to move.
“We have a lot of people living in harm’s way who would like nothing more than to get out of harm’s way, and the flood insurance program isn’t designed to help them accomplish that,” Moore said. “It’s designed to keep them there and rebuild their home in the same vulnerable location over and over.”
Another issue with the National Flood Insurance Program is the way in which it determines the houses that are located within high risk areas, and thus which houses are supposedly required to obtain mandatory coverage. To assess the risk to a particular home or building, FEMA uses flood maps, which analyze the best available science and modeling to assess the probability that a flood will occur in any particular area in a given year. Areas located in a 100-year floodplain — an area where a flood is reasonably expected to occur once every 100 years — are required to purchase flood insurance. But nearly one in five flood insurance claims, according to Moore, happen outside of the 100 year floodplain, calling into question how effectively FEMA’s flood maps illustrate actual risk. In Houston, for instance, the majority of homeowners affected by the flooding do not have insurance — only 40 percent of the total estimated damages might actually be covered by policies, according to the New York Times.
“There is clearly something out of whack with the flood maps we are relying on,” he said. FEMA flood maps don’t take into account sea level rise, meaning that especially for coastal areas, they are out of date almost as soon as they are issued.
Climate change creates conditions that lead to more dangerous flood events because it both encourages the formation of intense storms (warmer air holds more moisture, which then falls as rain) and fuels higher storm surges due to sea level rise. If carbon emissions continue to increase — and global temperature continues to rise — then infrastructure built based on flood maps created today could be vulnerable to flooding well before their intended lifecycle is over.
“These maps are used for making siting and design decisions for infrastructure like hospitals, schools, and fire stations that are going to be there for 50 or 60 years,” Moore said. “If you can’t show people what their flood risks are going to be in the future, you could be building billions of dollars in infrastructure in places that are going to be inundated.”
Currently, the National Flood Insurance Program is set to expire on September 30, unless Congress passes a bill reauthorizing the program. Ironically, the devastation wrought by Harvey has complicated chances for meaningful reform for the program, with a Republican staffer for the Senate Banking Committee telling Buzzfeed that negotiations to reform and reauthorize the program have been “put on the backburner” while Congress deals with the fallout from the storm. According to the staffer, the plan is to pass short-term re-authorization — which would keep the program afloat for a few more months — and then work on negotiating deeper changes to the program later. Another Republican aide told the Washington Post that any discussion to reform the flood insurance program right now would be “an absolute political loser.”
Moore points to a few bipartisan suggestions for flood insurance reform that he thinks could help make the program more effective at preventing flood disasters before they occur — things like requiring cities to come up with plans for relocating repeatedly flooded properties or giving potential homeowners the right to know the flood history of a property before they purchase (as it stands, FEMA only tells homeowners about their property’s flood history after they file their first flood-related claim). For the most part, however, flood insurance reform in Congress has centered around either bringing down the programs debt through higher premiums, or expanding coverage through private insurers.
“The bulk of the debate has been about getting people cheaper coverage, as if having flood insurance solves the problem of flooding,” Moore said.
The White House appears to support reforming the flood insurance program by turning it over to the private market. The Trump administration’s proposed budget suggested $8.9 billion in savings over the coming decade by “encouraging private competition in the flood insurance market,” and it proposed eliminating the program’s Flood Hazard Mapping program entirely. Less than two weeks before Hurricane Harvey hit the Texas Gulf Coast, President Trump also repealed Obama-era flood standards requiring federal infrastructure projects in flood-prone areas to be built to withstand damages from flooding.
But as climate change drives both stronger storms and sea level rise — and as development continues to pave over natural flood mitigants, such as wetlands — Moore argues that it’s difficult to see how privatization will stop the waters from rising time and again.
“I have yet to see a flood that retreats in the face of somebody showing them their insurance policy,” he said. “The real problem here is that too many people live in harm’s way, too little assistance is given to help them get out of harm’s way, and local, state, and federal governments are all complicit in moving people into harm’s way.”