Congress Again Defers on Reforming Flood Insurance Program

Lawmakers extend federal coverage but fail to lower Americans’ risk

Congress Again Defers on Reforming Flood Insurance Program
Flooded community
Floodwaters inundate a neighborhood in Pembroke, North Carolina, on Sept. 17, 2018, in the aftermath of Hurricane Florence. Despite the rising frequency and intensity of flooding in the U.S., Congress continues to pass on reforming the National Flood Insurance Program, which is $20 billion in debt.
Charles Mostoller Bloomberg via Getty Images

Despite overwhelming evidence of the need to substantially reform the National Flood Insurance Program (NFIP), Congress yet again failed to do so. Instead, lawmakers on Dec. 21 renewed the program through May 31—the 10th no-change extension since September 2017, after Hurricane Harvey unleashed catastrophic flooding in Texas.

The NFIP provides federally backed coverage for homeowners and small businesses in more than 22,000 communities throughout the country, but is $20 billion in debt, due in part to a recent succession of historically severe hurricane seasons and inland floods nationwide. 

Throughout this sustained period of extreme natural disasters, lawmakers have missed numerous opportunities to decrease costs from flood damages and improve the federal government’s management of flood risk. 

Further, Congress appears to have no long-term plan to put the program on a financially stable path, something that could be achieved by changing how the program deals with repeatedly flooded properties—those properties with multiple claims that account for a disproportionate share of program spending. By dedicating more resources to reducing risk, rather than paying for damages to the same properties over and over, policymakers could save taxpayer dollars and lessen the impact of the next big storm.

Congress has been negligent of a program that desperately needs changes and that many Americans rely on, especially as experts warn that the frequency of costly extreme weather events will continue to grow.   

Congress can and must do better. Fortunately, numerous commonsense solutions were introduced in the past Congress that would vastly improve the program. For example, a requirement that owners disclose a property’s flood history would help buyers and renters make more-informed choices about flood risk. Another proposal calls for investing in state revolving loan programs for flood mitigation projects, similar to those used to ensure safe and clean drinking water.  

Lastly, if the federal government is ever going to reduce the amount of money it spends on floods, it must invest in risk-reduction measures before disasters strike. These measures include elevating structures and buying out property owners in high-risk areas.

The extension secures the NFIP until May 31, enough time for Congress to hold hearings and debate policy. The incoming Congress must resist any urge to repeat the mistake of passing no-change extensions to this outdated—but vital—flood insurance program. Rather, Congress should seize the opportunity to improve the lives and safety of millions of Americans—and save the federal government millions of dollars—with a thoughtful, sound NFIP reform.

Laura Lightbody is a director with The Pew Charitable Trusts’ flood-prepared communities initiative.