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Mapping and mitigation of flood risks is getting more attention at the federal level after years of lobbying efforts by industry stakeholders, experts say.
The Federal Emergency Management Agency has historically been given limited resources to update flood maps and to support and promote mitigation of flood exposures for properties covered by the National Flood Insurance Program even though floods are the most common and costly natural disaster in the United States, but a new effort to extend the NFIP could change that.
In June, the U.S. House of Representatives Financial Services Committee approved H.R. 3167, the National Flood Insurance Program Reauthorization Act of 2019, on a bipartisan 59-0 vote. The measure includes a five-year extension for the NFIP, which had been given 12 short-term extensions and lapsed twice since fiscal year 2017.
“I wish it was longer than five years, but five years at least gives us some breathing room,” said John Burkholder, chair of the Risk & Insurance Management Society Inc.’s external affairs committee.
The bill would provide $500 million a year over five years for flood mapping and requires FEMA to utilize updated mapping technology, such as LiDAR, and ensure that maps are adequate for identifying future flood risk.
“One of the things that the catastrophes of the last several years has shown us is that our mapping is still inadequate,” said Chad Berginnis, Madison, Wisconsin-based executive director of the Association of State Floodplain Managers. “FEMA is still really only mapping the 100-year floodplain and the 500-year floodplain, but the required elements are future conditions mapping, residual risk mapping — the residual risk of flood even in areas that are protected by dams and levees — … and also expanding the maps in the country to areas of potential development and growth.”
The bill would create a new flood zone that accounts for levee-affected areas on flood maps and provides for insurance rates in accordance with the protection afforded by the levees.
Areas protected by levees have a unique flood risk, Mr. Berginnis said. “The flood risk is fairly low until a certain flood height is reached, and then if Mother Nature throws a bigger flood at you, the risk all of a sudden becomes catastrophic because the levee gets overtopped. The current flood zones we have are not reflective of the levee risk.” The mapping provisions are “extraordinarily important,” in part because they help ensure that mitigation efforts target the right locations, Mr. Burkholder said. “To address a risk, you have to have the right information,” he said.
On the mitigation front, the bill would provide $200 million each year for five years for the predisaster hazard mitigation program and create the first community assistance program for floodplain management by providing community assistance grants and technical assistance, among other steps — funding the effort with $20 million each year for five years.
“I think they did a very good job of addressing some concerns,” said Patty Templeton-Jones, president of Wright Flood, a Write Your Own insurer in St. Petersburg, Florida. “Mitigation and mapping — these are all very important things.”
The bill would authorize the FEMA Administrator to supplement the Increased Cost of Compliance program, which provides up to $30,000 to help cover the cost of mitigation measures to reduce flood risk, by raising the maximum amount to $60,000. Currently, an ICC claim must count toward the total claim of the property, which becomes “problematic when a building is substantially damaged,” but the bill would allow ICC benefits to be in addition to the maximum limit under a standard policy — $500,000 for nonresidential properties, Mr. Berginnis said.
“Those changes are much more reflective of the true cost of doing those kinds of mitigation activities as well as giving folks that have been substantially impacted the ability to tap into ICC,” he said.
The bill also authorizes FEMA to enter into agreements with eligible states to establish a flood mitigation assistance revolving loan fund to decrease flood risk, supporting eligible activities such as elevation or home relocation. But the bill did not place much emphasis on the problem of repetitive loss properties, which have historically accounted for 25% to 30% of the program’s losses, said Laura Lightbody, director of the Flood-Prepared Communities initiative of the Pew Charitable Trusts in Washington.
“This is a problem that we have focused a lot on not only because these properties are a financial drain on the federal insurance program, (but) they can be a real problem for homeowners and for communities,” she said. “But (the bill) could go further in terms of really holding communities accountable to take on these problem areas that have been identified as areas that flood over and over again.”
Observers are cautiously optimistic about the bill’s chances in the full House and the U.S. Senate, especially because it does not tackle more divisive issues such as how to address the program’s nearly $21 billion debt.
Congress will eventually have to deal with the debt because it is “unsustainable,” but it was “wise to go ahead and pull out the issues that have been roadblocks in the past,” Mr. Burkholder said.
A new rating initiative for the National Flood Insurance Program may cause some short-term pain for buyers of flood coverage but is a necessary step toward putting the program on sound financial footing, experts say.