At issue: The effects of climate change — more frequent flooding from torrential rains, hurricanes and other phenomena — are straining the federal flood insurance program, exposing U.S. taxpayers to a potentially growing price tag of flood relief payouts.
The problem arises in years with particularly powerful storms. In fiscal 2013, the agency paid out $8.2 billion mostly for damage resulting from Superstorm Sandy — well above the approximate $3.5 billion the NFIP acquired by premiums that year and enough to swamp the years in which premiums exceeded claims.
“The issues associated with adapting to climate change and making our country more resilient keep getting louder and louder,” said Brian Deese, a White House senior adviser on climate, during an event at Columbia University last week. “We know that the frequency and severity of natural disasters like hurricanes and droughts are increasing rapidly, and we need to deal with their impacts even if we succeed on the mitigation front.”
“We are going to need to fully embed climate resilience in the way our federal agencies operate. We need to move away from this idea that you pay for rebuilding after the disaster strikes and move toward awarding resiliency efforts before the storm gets there,” Deese said. “We are going to need to have very tough conversations about things like the federal Flood Insurance Program and start to recognize what major insurance companies are recognizing, which is the 100-year flood standard is less useful when 100-year floods are occurring every five years.”
While Deese didn’t say so directly, those tough choices could include some politically risky measures, such as redrawing the boundaries of flood zones, which could require more property owners to purchase flood insurance in order to qualify for mortgages.
Deese added that the federal government needs to look at “practices that expose the federal budget sheet and taxpayers to big, lingering liabilities.”
In a 2015 report, the Government Accountability Office came to the same conclusion: Losses generated by the program, as well as the potential for future losses, “have created substantial financial exposure for the federal government.” The flood program has been on GAO’s High Risk List since 2006, and the program owes $23 billion to the U.S. Treasury, according to a June report.
In a separate GAO report, issued in March, the agency said FEMA must do a better job of collecting information that would ensure that flood insurance premiums align with changes in flood risk — especially as those risks grow in areas where they historically occurred less frequently.
©2016 CQ-Roll Call, Inc., All Rights Reserved. Visit CQ Roll Call at www.rollcall.com. Distributed by Tribune Content Agency, LLC.