Flooding risk has gone up, but not insurance

WASHINGTON — Despite years of devastating floods and hurricanes, the number of Americans with flood insurance remains well below its level a decade ago, undermining the nation’s ability to cope with disasters just as climate change makes them more frequent and severe.

In some of the states hardest-hit by the recent brutal flooding in the Midwest, the number of federal flood insurance policies has dropped by at least onethird since 2011. As a result, in Nebraska, Illinois and Missouri, the share of homes in floodplains that have flood insurance is now 15% or less.

The declines have persisted despite a two-year campaign by the Trump administration aimed at doubling the number of Americans insured against floods, which standard home insurance policies typically don’t cover. That effort has faltered, and officials are now beginning to worry about the disaster after the disaster: What happens as the water recedes, and many people can’t afford to rebuild?

The reasons for fewer people having insurance are complex. Despite the recent onslaught of disasters, people tend to underestimate the odds of something bad happening to them, behavioral economists say. Add to that the escalating cost of coverage, and changes to the federal flood insurance program, and the result is a persistent hole in the country’s defenses against climate change.

“Flood insurance is the best recovery tool that individuals can have,” said Daniel Kaniewski, deputy administrator for resilience at the Federal Emergency Management Agency. “It’s so important that the American public understands this.”

For 50 years, the federal government has offered subsidized flood coverage through the National Flood Insurance Program, which is run by FEMA and provides about 95% of all residential flood policies in the United States. But earlier this decade, Congress instructed the agency to let rates rise so they more closely reflect the true risk of flooding.

As a result, average premiums have gone up between 5% and 9% a year, and the increase can be as high as 18% for individual homeowners. When those increases started, “people started dropping policies,” said Karen Mchugh, Missouri’s coordinator of the flood insurance program.

Rates can vary widely from place to place based on a home’s location and elevation. But inside the floodplain, average annual premiums in 2015 were $1,098, with costs several times that much for homes facing the greatest risk, according to data released by FEMA in 2018.

For many people, that financial burden can be considerable. Of the households in the floodplain that have flood insurance, about onequarter are low-income, the data show.