May 8, 2023 - Climate

How flood insurance could become more equitable

A family of four, with their backs to the camera, motors along in a small boat through a flooded neighborhood. Mobile homes and a cloudy sky can be seen in the background.

The Maldonado family travel by boat to their home after it flooded during Hurricane Ida in Barataria. Photo: Brandon Bell/Getty Images

As New Orleans heads into hurricane season, changes could be on the way for the National Flood Insurance Program, with 17 proposed edits up for adoption by Congress.

Why it matters: With last year’s Risk Rating 2.0 updates to the NFIP, Louisiana owners of single-family homes are already projected to see their premiums jump 134% on average, reports | The Times-Picayune.

  • But, if accepted by Congress, some of the proposed changes could alter the program in more manageable ways for some low-income homeowners.

Zoom out: At 25%, Louisiana has the highest rate of flood insurance-protected homes, according to a PolicyGenius review of NFIP and Census data.

  • Between 1996 and 2019, 99% of American counties flooded at least once.
  • The Federal Emergency Management Administration, which manages the NFIP, is hoping to bring on more policy holders nationwide in a bid to shore up the program’s finances.

State of play: Among FEMA’s proposals is a law change that would allow the NFIP to adjust flood insurance premiums to reflect a homeowner’s ability to pay.

  • Speaking on Capitol Hill on Tuesday, Sen. Elizabeth Warren pointed out that people of color, low-income homeowners and people over 65 tend to “get hit harder” by flooding because they more often live in flood-prone areas, thanks to America’s history of segregation and federal policies like redlining.
  • FEMA assistant administrator of the Federal Insurance Directorate and NFIP senior executive David Maurstad has confirmed the organization doesn’t track the race or ethnicity of who receives aid, saying in 2022 that “because we don’t collect it, we don’t discriminate against individuals.”
  • But Warren rejected that notion Tuesday, saying, “Just because there’s not intentional discrimination does not mean that aid is distributed equitably.”

Other changes to the NFIP would include the cancellation of $20.5 billion in debt the program owes to the federal government, payments on which eat up a large chunk of the NFIP’s current revenue.

  • Another change would allow the program to refuse coverage of properties that flood repeatedly. The NFIP has paid out on 350,000 flooded properties at least twice, | The Times-Picayune reports.

Go deeper: FEMA’s summary of its proposed NFIP changes.


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