The American flood insurance programme is drifting away. What can the U.S do to stop this?
The most costly and common natural disaster in the United States is flooding, more protection insurance is needed in certain areas. The Union of Concerned Scientists released a report which suggests the country has an uncertain future.
The reports predict that almost 170 U.S coastal communities will have to deal with chronic inundation a minimum of 26 times a year within the next 20 years; that’s nearly double the amount of at-risk locations the U.S have right now.
The flood insurance programme (NFIP) was created by congress in 1968 as a response to the cost of disaster assistance dramatically increasing, whilst a vast amount of private insurers were abandoning this problematic market. This program requires people purchasing homes in floodplains to take out insurance if they have to pay a mortgage.
The programme also gives people a grant in order to lessen the potential damage certain properties may face in high-risk flood areas. They do this by either elevating their property or by buying out homeowners and demolishing the properties.
According to the NRDC, buying people out their homes is not happening enough. They say that the programme is making people stay in properties that are unsafe and that the government needs to start dealing with flood issues differently.
In 2005, Hurricane Katrina was the catalyst for the financial issues in the U.S. Hurricanes Rita and Wilma followed shortly after causing even more damage. NFIP had to borrow $17.5 billion from the U.S treasury because they had to pay eight times as many claims than any other previous year.
There was not one extreme or catastrophic event that hit the U.S in 2016, however floods in Louisiana, Texas and other states meant that the programme had it’s third largest year of payouts since the program began.
Though the programme faces many problems, lawmakers understand that NFIP helps millions of American homeowners across the country. If they do not reauthorise the program this year, then it could bring major problems for the real estate market.
Steps are being made to try and help the programme. A House committee have passed a legislation to restore the programme. If it goes through, the legislation would help reduce persistent flooding problems for many communities.