Viewpoint: The Imperative of Long-Term NFIP Reform

By Chris Brown | March 15, 2024

In the wake of a record-shattering $28 billion-dollar extreme weather and natural disaster season in 2023, the U.S. finds itself at the mercy of an increasingly volatile climate.

As hurricanes grow fiercer, sea levels rise and rainfall patterns shift, one crucial line of defense once again stands at a crossroads—the National Flood Insurance Program (NFIP). Yet, with its fate hanging in the balance, the NFIP is not merely grappling with floodwaters but navigating treacherous political currents as well.

The program’s survival, marked by 28 short-term reauthorizations since 2017, resembles a temporary fix on a systemic wound, as the nation hurtles toward a future where floods are not just a possibility but a certainty. The question looms: Can a federal program drowning in uncertainty and debt truly safeguard the economic security of millions against the rising tide of extreme weather disasters?

Chris Brown

With the latest expiration quickly approaching – it is now set for March 22 – the NFIP’s livelihood remains uncertain and its current mode of operation serves as a temporary Band-Aid on a wound that demands comprehensive treatment. Rising sea levels, intensifying storms, and shifting precipitation patterns have exacerbated the impact of flooding on communities across the nation.

Short-term reauthorizations fail to address the pressing need for comprehensive reform to better align flood insurance rates with actual risk. Instead, hurricanes and inland flooding continue to strain the financial health of the NFIP, paying out claims at an unsustainable rate, resulting in a $20.5 billion debt to the treasury, according to the Congressional Research Service.

Moreover, short-term reauthorizations hinder the implementation of forward-thinking policies aimed at mitigating flood risk and enhancing community resilience. From investing in nature-based solutions like wetland and shoreline restoration to adopting stringent building codes, there are myriad strategies to bolster defenses against flooding. However, the uncertainty surrounding the NFIP’s future undermines the incentives for proactive resilience measures, leaving communities vulnerable.

The recurrent pattern of short-term reauthorizations not only disrupts but undermines the fabric of long-term planning and investment, casting a shadow over both individual property owners and expansive economic development initiatives.

In the realm of property purchases, insurance coverage decisions, and infrastructure investments, businesses and homeowners yearn for a bedrock of stability and predictability. However, subjecting the NFIP to a perpetual loop of short-term extensions crafts an atmosphere rife with uncertainty, stifling the very essence of progress. This perpetual uncertainty spins a narrative of reactive disaster recovery efforts rather than fostering the proactive resilience needed in the face of evolving climate challenges.

It’s time for a shift in how we approach post-disaster recovery. American taxpayers should not bear the burden of continually funding cleanup efforts when more effective alternatives are within reach.

To steer the NFIP away from consistent deficits, Congress must implement risk-based pricing that accurately reflects the flood risks associated with a property in addition to promoting fairness and encouraging risk reduction. Enhancing the program’s ability to cover its costs by expanding existing and entering into new public-private partnerships can also better equip FEMA to fund the payment of flood claims after catastrophic flood events and reduce costs to taxpayers.

As part of broader reforms to our natural disaster preparedness apparatus, we must also recognize the value of our natural coastal defenses in mitigating the impact of hurricanes.

Preserving the health of coastal habitats serves as a powerful tool in reducing the devastation wrought by these storms. For example, in the case of Hurricane Sandy, wetlands mitigated damages by more than 22% in half of the storm-affected regions (up to 30% in certain states), resulting in an estimated saving of $625 million in direct flood damage. By investing in the protection and restoration of these ecosystems, we can also reduce the financial burden on taxpayers associated with post-disaster cleanup recovery efforts.

More properties, coastal and inland, are at risk than ever before, while the cost of repairing or rebuilding those properties is far more expensive than originally imagined. The NFIP was created to serve a different threat at a different time. That threat has changed. Flooding events have become more extreme since its inception in 1968, a time when emergency response often relied on communication methods like the rotary phone and walkie-talkies.

The NFIP now exists alongside advanced modeling techniques, satellite imagery, and community resilience initiatives, highlighting a significant shift in how we understand and mitigate flood activity. Yet the program remains stuck in policies that have for decades failed to appropriately address risk.

To fulfill its mission in the face of evolving flood dynamics, the NFIP must undergo significant reform, with Congress committed to ensuring the program’s continued operation and long-term improvement. Until then, a short-term reauthorization of the NFIP is crucial to protecting the economic security of millions of Americans in the face of intensifying flood risk.

Brown is the executive director of the SmarterSafer Coalition. SmarterSafer is a national coalition made up of a diverse chorus of voices who champion a united front for environmentally responsible and fiscally sound approaches to natural catastrophe mitigation and the promotion of public safety.

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