Climate Change, Flooding, and Public Insurance: Contextualizing the Midwest Floods

Students are blogging about topics that interest them for Applications in Climate and Society, a core spring class.

Elizabeth Perry, C+S ’19

Nebraska 2019 Flood Response (Source: Army Staff Sgt. Koan Nissen)

In the wake of record flooding in the Midwest, and projections of flooding for the rest of the season in 25 states, it’s time to take a closer look at the organization that could help Americans bear the brunt of the damage. The National Flood Insurance Plan (NFIP) is the federal organization that insures millions of Americans living in floodplains. While supporting these individuals and their families in the short term, NFIP could do significant harm to homeowners in the long run without planning for climate change.

NFIP’s original purpose was to provide property insurance for people living in flood-prone areas where the cost of private insurance would be prohibitive. To protect millions of Americans against costly damage from floods, Congress created it in 1968 as a division of the Federal Emergency Management Agency (FEMA). Recently, some have argued that this program subsidizes areas of high flood risk, leading to repeated payouts in these areas. And as of 2017 following some intense hurricanes, NFIP was over $20 billion in debt.

What’s Wrong with the System? What’s Happening in the Midwest?
FEMA’s flood maps attributing flood risk are outdated. Incredibly powerful storms in recent years have occurred more frequently than in the historical record. This is tied in part to warmer air temperatures, which can hold and ultimately release more water. The go-to indicator of flood risk is the 100-year flood zone, an area that sees severe flooding on average once every hundred years. Put another way, it’s an area with a one percent probability of flooding occurring in a given year.

However, the 100-year flood area will expand as much as 45 percent by 2100. Recently, places across the country have seen several “100-year” floods in the past few years alone. If the flood maps continue to reflect the 100-year floods of the past, NFIP will continue to de-incentivize moving to safer and higher ground. NFIP does have some “deterrence” policies like requiring homes to be built on the highest ground of your property, but they’re based on an historical understanding of flood risk.  

This is an issue because climate change will affect storm strength and precipitation rates throughout the U.S.  Since 2015, some of America’s biggest flood disasters have been inland. The recent storms affecting the Midwest are expected to exceed $1.3 billion in damages for Nebraska alone, and the recent events in the Midwest could be just a sign of what’s to come.

What Can Change?
There are a few ways to protect Americans against this damage while also fixing NFIP. Some have suggested helping those who are at highest risk move to higher ground, improving transparency in policy and reworking the 100-year flood maps to indicate current and future risk under climate change and sea level rise scenarios. And frankly, without these updates, we’re flying blind.

Reform is in the air on Capitol Hill as well. The House Financial Services Committee met in mid-March to discuss challenges facing NFIP. FEMA is contemplating a rewrite to the general terms and conditions currently in place, and insurance costs may soon reflect the risk of the property. Ultimately, federal flood insurance is a public good, but without reforming policies, this program keeps paying out more than it takes in year after year and puts pressure on homeowners and the taxpaying public.