The same houses flood every year and we keep paying for them
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There is a house outside Baton Rouge, Louisiana, that is prone to flooding. It’s worth close to $56,000. Over the years, it has flooded a lot — about 40 times — and accumulated almost $430,000 in flood insurance claims.

There is another house in Houston, Texas, with an assessed value of $72,400. It has also frequently flooded and received over $1 million in flood insurance payouts. 

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In Roanoke Valley, Virginia, there is a 300-unit apartment complex that over a period of nine years received more than $10.5 million in flood insurance payouts.

 

Who has made all these insurance payouts? Property owners who purchase flood insurance through the National Flood Insurance Program (NFIP) and ultimately, when the premiums run short, federal taxpayers.

Congress created the NFIP close to 50 years ago, undoubtedly with good intentions. Those intentions, however, have allowed the program to incur a federal debt of over $24 billion, in part because it keeps on insuring properties that suffer repeated flooding.

It’s time for the nonsense to stop.

Flooding is our most common natural hazard and one of our most costly. From 1980 to 2013, flooding caused over $260 billion in damages across the nation. The NFIP issues flood insurance policies to approximately 5 million property owners in all fifty states. 

Repetitive flooding has been a major challenge for the program since its creation in 1968. Just 1 percent of insured properties have accounted for more than 30 percent of the claims paid. Repetitive losses occur in every state, but five states — Texas, Louisiana, Florida, New York and New Jersey — have 10,000 or more properties that frequently flood. The absolute number of homes repeatedly flooding is estimated to be increasing by at least 5,000 a year. And nearly one out of 10 homes had claims for repetitive flood losses that were greater than the value of the home.

A recent analysis of NFIP related data revealed that the owners of approximately 22,500 out of 30,000 repetitive loss properties had not taken any action to reduce their vulnerability to flooding or received any assistance to do so. Unbelievably, those NFIP policy holders, who have incurred repetitive losses, currently face no limit on the total value of payments they may receive or on the number of claims made.

With changes in climate patterns, as well as increasing urbanization-particularly along our coasts-flooding damages will increase — a lot. The Union of Concerned Scientists predicts that chronic flooding from rising sea levels alone will impact almost 170 cities and communities within the lower 48 states in less than 20 years. More than 100 of these cities would see at least a quarter of their land routinely flooded.

In recognition of the growing risk of coastal flooding, the chief economist at Freddie-Mac recently observed that home borrowers may find their properties underwater — both figuratively and literally — before they even have a chance to pay off that 30-year mortgage note.

We are currently seeing the average loss of at least a football field of land an hour in Louisiana, Alaska villages perilously close to slipping into the Chukchi Sea, and Chesapeake Bay communities routinely suffering from “sunny day flooding.” This issue is impacting us now and costing too much; tomorrow it will be worse.

Indeed, the U.S. has already witnessed an increase in billion-dollar damage events caused by inland flooding. Just last August, Louisiana suffered over $10 billion in damages from flooding caused by 20 to 30 inches of rain falling over several days. The rain damaged or destroyed 50,000 homes. It was the biggest flooding event since Superstorm Sandy in 2012.

The National Flood Insurance Program expires by law in September. Congress and the White House are working on reauthorization legislation. With changes in climate patterns, flooding will increase in frequency and intensity.

Any reauthorization by Congress should include structure-based risk pricing for all (you pay for your risk, not the risk of others). It should end the repetitive loss cycle of insuring properties that will inevitably flood again and again — those property owners should receive help to move to safer ground. The nation can no longer afford the nonsense of paying for severe repetitive flooding.

Alice C. Hill is a research fellow at the Stanford University Hoover Institution. She previously served as special assistant to President Obama and senior director for resilience policy at the National Security Council. 

Craig Fugate served as President Obama’s FEMA administrator. Previously, he served as Florida Governor Jeb Bush’s Emergency Management director. 


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