The flood next time

When the water recedes from the homes of Houston, there will be far more to contend with than ruined possessions, structural damage and mold. Federal flood insurance, already billions in debt and damn near dysfunctional, faces an existential reckoning.

With 500-year floods now seeming to come every few years, Americans still building with abandon in areas in danger of being washed away, and a deadline for reauthorizing the program looming in October, Congress must focus all the pragmatism and political courage it can muster on a fix.

Pragmatism? Political courage? Congress? Don’t laugh. There’s no alternative.

First, a quick tutorial. The National Flood Insurance Program was created back in 1968 when it became clear that the private market for helping people protect themselves financially from flood risks was fundamentally broken. In short, nobody wanted to provide the product because one catastrophic event could wipe a carrier out.

In stepped the feds, with the capital and the willingness to assume risk. As of April 2010, the program insured about 5.5 million American homes.

Generally, homeowners in the most vulnerable areas — parts of the country deemed susceptible to catastrophic flooding once every 100 years — are effectively forced to buy the relatively pricey product. You can’t get a federally backed mortgage unless you have flood insurance.

In the next tier of risk — swaths deemed susceptible to such flooding once every 500 years — it’s optional.

But because it’s expensive, ranging from an average of $500 to a high of surpassing $2,000 a year in some parts of Texas, few homeowners bother. Perhaps it’s human nature to live with what appears to be the remote probability of disaster, and worry about paying the piper later, rather than pay the bill month after month.

Indeed, even as chronically flood-plagued Houston’s population grew over the last five years, the percentage of homes covered by flood insurance dropped precipitously.

So spotty has the coverage become that in Houston, four out of five homeowners devastated by Hurricane Harvey are uninsured, leaving them utterly upended, and likely a bigger burden to government. A similar share of New York homeowners flooded in Hurricane Sandy were uncovered when that storm struck in 2012.

There’s no simple way to bail out the National Flood Insurance Program’s waterlogged boat. Flood maps need to be refined, and pricing finetuned, to encourage more people to buy in. The public must be educated on the importance of preparing for a very, very, very rainy day.

But ultimately, the only hope that anyone really has of keeping this financial life raft afloat is getting more of the 25 million Americans who live in flood plains to buy in.

How best to do that? First, keep the mortgagebased requirement in place for those in greatest danger — and take the politics out of scientific calculations of who’s at highest risk.

Then, consider giving a sharp nudge for those in less risky but still flood-prone areas: automatically opt them into flood insurance, making them opt out on an annual basis if they really want to take the chance.