Resiliency, mapping and consumer choice changes recommended for National Flood Insurance Program

More focus on resiliency measures, updated mapping techniques and increased consumer choices are among the recommendations for reforms to the National Flood Insurance Program (NFIP) issued by a coalition for “environmentally responsible, fiscally sound approaches to natural catastrophe policy that promote public safety.”

On Wednesday, SmarterSafer – a United States national coalition of taxpayer advocates, environmental groups, insurance interests, housing organizations and mitigation advocates – released a proposal for how the U.S. Congress should reform the NFIP before it expires in September.

The memorandum was issued in advance of the upcoming U.S. Senate Committee on Banking, Housing and Urban Affairs. The committee will hold a hearing titled Reauthorization of the National Flood Insurance Program (NFIP), Part II, which will feature Steve Ellis, vice president of Taxpayers for Common Sense on behalf of SmarterSafer; Michael Hecht, president and CEO of Greater New Orleans, Inc. on behalf of the Coalition for Sustainable Flood Insurance; and Larry Larson, director emeritus and senior policy advisor of the Association for State Floodplain Managers.

“As currently written, the NFIP is completely unsustainable – which is evident by the program’s almost US$25 billion debt to U.S. taxpayers,” SmarterSafer said in the memo. “Additionally, the NFIP fails to adequately deter new development in areas vulnerable to flooding that lead to further environmental degradation, and does not do enough to encourage states, communities and individuals to reduce their vulnerability to current and future flood risk.”

The proposal issued by SmarterSafer “outlines how Congress should update and improve the NFIP by better managing the nation’s escalating flood risks, reducing those risks over the long-term, promoting environmental stewardship and easing the financial burden for flood risk now borne by federal taxpayers,” the memo pointed out.

To address these needs, SmarterSafer’s proposal recommends, among other items, that any reauthorization of the NFIP should prioritize the following reforms:

• Focus more on proactive resiliency measures that will lessen the amount of damage when storms hit;
• Update and improve mapping techniques to ensure accurate, up-to-date risk analysis so that rates accurately reflect risk;
• Allow consumers choice in flood insurance policies by ensuring private insurers have access to the flood insurance market, giving consumers access to better rates and higher coverage limits; and
• Continue to move towards a system of risk-based rates for all properties while providing assistance to lower-income policyholders, with an emphasis on subsidizing mitigation instead of rates.