The number of Americans currently vulnerable to flooding nationwide has been woefully underestimated by the Federal Emergency Management Agency — a finding that could impact homeowners’ insurance in low and moderate flood zones, according to a new assessment.
Property at risk of flooding is more than double current FEMA estimates and nearly 41 million Americans — three times the current projections — could be exposed to a major flood, according to a study by researchers at the University of Bristol, the Nature Conservancy, and the Environmental Protection Agency (EPA).
The findings, if accurate, could dramatically affect how FEMA calculates flood insurance premiums and may expose millions of otherwise uninsured homeowners to coverage requirements. The assessment comes just as the National Flood Insurance Program (NFIP) inches toward expiration next week and as experts say sea-level rise will only make low-lying coastal markets more vulnerable.
“This just serves to show that just because you’re not in the federal floodplain it doesn’t mean that you’re not at risk of flooding,” Oliver Wing, a co-author of the study, told Inman News on Thursday. “And so perhaps it will be an urge for them to purchase flood insurance, for instance.”
Housing and geology experts pointed to outdated mapping as the reason for the miscalculated numbers. FEMA relies on local authorities to map flood zones, which can become vulnerable to the political whims of real estate developers and property owners lobbying for lower premiums. Many of the older maps, meanwhile, remain outdated, and FEMA has only authorized maps for a little more than half of the country, according to a report by the Miami Herald on Wednesday.
R.J. Lehmann, the director of finance, insurance and trade policy for the R Street Institute, a nonprofit think tank in Florida, said three-dimensional LiDAR mapping, already deployed by the state of North Carolina, provides more precise images of the Earth’s contours and surface.
“The old paper maps assume very crude metrics, like where floods can go, and they’re only divided into three zones,” Lehmann told Inman. “You’re in the costal region, where you’re in a storm surge, or you’re in a flood region — where you have a 1 percent or greater chance — or you’re not in a flood region. And there’s a lot more granularity to that than those maps show.”
In an email to Inman, a spokesperson for FEMA said the agency’s mapping system is updated as new technology evolves while also acknowledging that the maps in use are intended to help determine flood insurance premiums in high-risk areas, rather than chart a comprehensive view of exposure to low and moderate flood risks farther inland.
“These maps are intended to inform flood insurance requirements and regulate development standards in high-risk areas — they are not intended to show absolute lines where flooding will and will not occur,” the FEMA spokesman wrote Friday. “Anywhere it can rain, it can flood, which means that areas depicted on FIRMs as having low or moderate flood risk are still at risk of flooding. The mapping standards are published, vetted, peer-reviewed, and updated continuously to ensure they are aligned with current best practices. In 2016, the FEMA Administrator certified to Congress that the FEMA mapping program produces technically credible flood hazard data. This was informed by the Technical Mapping Advisory Council, an organization created by Congress which reviewed the structure, process, outputs, quality management, and metrics for the program.”
With the new assessment, Lehman said a strong case can be made for opening up the flood insurance market to more private insurers, who would have a greater incentive to provide policies now that the number of Americans exposed to flooding has tripled FEMA estimates.
“This is evidence that the emerging private market, which is still small but growing pretty fast, can take up a lot more of the slack from the NFIP,” said Lehmann. “Insurance companies are way better at marketing than the federal government is. If there’s one thing we can agree on it’s that insurance companies are pretty good at making commercials.”
Next week, a three-month extension of the National Flood Insurance Program is set to expire, likely triggering a new temporary extension for the ailing but increasingly vital 49-year-old plan. Legislation to reauthorize and reform the program passed in the House 237-189 in November, but has stalled in the Senate, and experts say the likelihood of it being reintroduced this year is slim.
Under the pending “21st Century Flood Insurance Act,” the program would be reauthorized for five years while receiving a $1 billion infusion to elevate, buy out or mitigate the riskiest of an estimated 5 million policyholders. Premiums, which on average cost $650 annually but can spin out of control in coastal regions, would be capped at $10,000, while new mapping technology would help reduce rates by calculating the true risk of flooding farther inland.
“Five million taxpayers depend on the NFIP as their only means of insuring property against future flooding, the most common and costly natural disaster in the United States,” wrote National Association of Realtors President Elizabeth Mendenhall in a letter addressed to the Senate earlier this week. “Without flood insurance, federally related mortgage loans cannot be made in neighborhoods in 22,000 communities nationwide. As a result, current homeowners could be forced to rely on federal supplemental disaster aid when major flooding occurs.”
A Trump Administration federal budget proposal released last month, meanwhile, calls for steep cuts to FEMA’s Flood Hazard Mapping and Risk Analysis Program, which has been cited as a key to reducing rates for some homeowners by calculating the true risk of inland flooding. While largely customary, the proposal drew sharp criticism from Lehmann and other experts.
“In a nutshell, that’s not a good thing,” said Lehmann of the Trump Administration proposal to cut FEMA spending on maps. “We definitely need to invest in that program. It’s kind of a perfect example of a penny smart and a pound foolish. The amount of both disaster assistance and flood insurance debt that we’ve accrued far exceeds the cost of investing in new maps.”
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