Even as Floods Worsen With Climate Change, Fewer People Insure Against Disaster

A residence partially submerged in floodwaters from the Arkansas River in Fort Gibson, Okla., on Sunday, May 26, 2019. The Midwest floods have highlighted a gap in disaster readiness: Fewer Americans are buying flood insurance, even as climate change increases their risk. (Nick Oxford/The New York Times)



By Christopher Flavelle

WASHINGTON — Despite years of devastating flooding 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 one-third 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 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, spurred by rising risk levels 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 understand 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 been rising 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 one-quarter are low-income, the data show.