Flood Principles to Guide National Flood Insurance Program Reform Efforts

Click here to read SmarterSafer Flood Principles

(Washington, DC) – SmarterSafer.org today unveiled a set of “Flood Principles” to help reform efforts to the National Flood Insurance Program (NFIP).  The principles were released around a Senate Banking, Housing and Urban Affairs Committee hearing on the NFIP Reauthorization bill that will confront the program’s troubles on Wednesday, September 22, 2010.

The SmarterSafer.org principles attached to this release directly address key issues of the NFIP program, which include:  mapping, actuarial rates, risk mitigation, flood plain management to protect environmental values and encouraging private sector involvement.

Steve Ellis, Vice President, Taxpayers for Common Sense and a key witness testifying before the upcoming Senate hearing said, “Congress must significantly reform the National Flood Insurance Program to put it on sounder financial footing, not dig it a deeper financial hole with loopholes, new insurance lines or undercut the program’s ability to charge actuarially sound rates.”

“With the nation’s flood risks and costs continuing to rise, driven in part by more powerful storms and rising sea-levels, with more and more properties having repeated flood claims and payments, and with substantial federal flood insurance subsidies still encouraging development and redevelopment in many high-risk and environmentally-sensitive areas, it’s clear that the National Flood Insurance Program needs serious reforms.  We look forward to a upcoming comprehensive review initiated by FEMA Director Craig Fugate to engage the public and make key recommendations that can help put this program on a more sustainable course, while protecting the public’s health and safety and the environment,”  said David R. Conrad, Senior Water Resources Specialist, National Wildlife Federation.

“In a changing climate, we encourage the Senate to take bold steps to communicate and mitigate risk from floods to safeguard communities.” said Shana Udvardy, Director of Flood Management Policy with American Rivers. “The rising toll of annual floods sends a clear message: it is time to adopt a 21st century approach to flood management.  One that places our “natural defenses” – wetlands, rivers, floodplains, and upland areas – at the core of flood management.” said Udvardy.

“By making better use of mapping, flood risk information, risk mitigation and incentives, the National Flood Insurance Program could improve protection of floodplains that provide clean water and wildlife benefits, make communities safer, and ensure more responsible use of taxpayer dollars,”said Ed Hopkins, Director of Sierra Club’s Environmental Quality Program.

“NFIP is seriously broken and needs significant changes quickly. The currently pending bills don’t move things nearly far enough in the right direction. We put together SmarterSafer.org’s principles in order to establish a road map for putting the program on sound financial footing, protecting the environment, preserving property, and saving lives,” said Eli Lehrer, National Director of the Center on Finance, Insurance, and Real Estate at the Heartland Institute.

Background:    The National Flood Insurance Program (NFIP) is seriously broken and in need of substantial reforms and improvements.  While the NFIP provides flood insurance for millions of homes and businesses, it has fundamentally failed to keep pace with and to adequately discourage buildup of flood risks and damages across the nation.  Subsidized insurance rates and failure to mitigate large losses from repetitively-flooded properties continue to underwrite building and rebuilding in high-risk floodplain locations.  The program has not adequately accounted for the increased frequency and severity of major storms and hurricanes, due in part to land development, changing climates and rising sea-levels.  Subsidies in the NFIP and continued repetitive losses have contributed to the deterioration and loss of important floodplain and coastal habitat areas and the decline of valuable and sensitive ecosystems.
Additionally, the NFIP is $19 billion in debt.

With annual revenues of only $3 billion, there is no possibility that the NFIP will be able to repay the debt from program revenues.

SmarterSafer.org is a national coalition made up of a diverse set of voices united to support environmentally-responsible, fiscally-sound approaches that promote public safety. The Coalition strongly opposes legislative proposals that encourage people to build homes in hurricane-prone, environmentally-sensitive areas by creating new programs that directly or indirectly subsidize their homeowner’s insurance.

Click here to read SmarterSafer Flood Principles