US: Flooding is the most common natural disaster across the nation — insurance is making it worse

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By Collin O'Mara

For 50 years, the National Flood Insurance Program has subsidized risky development in floodplains. This has put people in harm’s way and run up more than $36 billion in debt. Congress must reform the program before the damage is irreversible.


When developments are built in floodplains, these benefits are quite literally paved over, harming communities and the environment. Construction in floodplains increases the risk of devastating floods, inflates taxpayer costs, and degrades habitat and water quality, but often occurs to satisfy the growing demand for more housing.


Congress should reform the program to allow consumers choice by enabling private sector competition in the flood insurance marketplace. The NFIP has accumulated $36 billion in debt, and allowing private sector competition could help take the burden off the backs of taxpayers. For some consumers, the one-size-fits-all NFIP does not provide affordable options that private insurers could offer, possibly with lower premiums. A recent Milliman study found that 60 to 80 percent of homeowners in the Gulf states could see a reduction in premiums with private flood insurance. 

The NFIP must be reformed to incentivize mitigation efforts to better prepare communities nationwide before a disaster strikes, rather than paying for recovery after the fact. By restoring natural features — like coastal dunes and wetlands — and investing in community-wide mitigation, the NFIP can lessen premium costs, reduce flood risk, and better protect the environment. A recent study also found that every $1 invested in mitigation saves taxpayers and the federal government $6 in disaster recovery, safeguarding the program for future years.


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