Texas hurricane exposes flaws in flood protections

“Today, the Property Casualty Insurers Association of America estimates that homeowners covered by federal flood insurance pay just half of the “true-risk cost” to insure their properties. In the highest-risk areas, they pay just a third.” A series of disasters has left the NFIP struggling financially. Hurricane Katrina and Superstorm Sandy devastated the flood insurance program’s budget and today, the program is about $24 billion in debt. As climate change fuels an increase in disasters, storms of the same caliber may become the norm.“There is actually a 50 percent chance within a 10-year period the NFIP will once again experience Hurricane Sandy-size losses,” Roy Wright, the director of the NFIP, wrote.Financial concerns aside, there are other problems as well. The program encourages people to build and stay in areas that flood constantly. There’s no incentive to leave because taxpayer subsidies rebuild homes and buildings, even if those structures have repeatedly flooded.Attempts to overhaul the NFIP have not been successful and repeatedly have been met with backlash. In 2012, Rep. Maxine Waters (D-Calif.) and Rep. Judy Biggert (R-Ill.) introduced the Biggert-Waters Act, a law that would increase the rates for business properties in special flood zones and properties that experience repeated flooding. These proposed increases would have led to an enormous spike in premiums. According to a 2013 RAND Corporation study, premiums in flood prone areas in New York City would have increased by $5,000 to $10,000 a year. Even Rep. Waters was outraged once the numbers came in and was part of a bipartisan effort to draft a bill to make sure premiums wouldn’t suddenly spike. In 2014, Congress passed the Homeowner Flood Insurance Affordability Act, which delayed the Biggert-Waters reforms for two years. Today, premiums now have slowly begun to increase. The current White House proposal for the program would certainly lead to more financial headaches. As part of deciding which areas are riskier, FEMA creates flood maps—but many of them are out-of-date. Funds had been previously allocated to update them, but Trump’s proposed 2018 budget included cutting $190 million from this effort. Without that money, FEMA would be forced to find money from somewhere else to fund mapping.Financial solvability aside, the NFIP is must be reauthorized by September 30.