Californians Need Action on Flood Insurance Reform

By Joshua Saks

Flood insurance for more than 300,000 Californians could dry up unless Congress fixes the broken federal program responsible for backing their policies.

The National Flood Insurance Program (NFIP), which serves as the first line of defense against flood damage for more than 5 million policyholders nationwide, is $23 billion in debt and struggling to keep up with new claims. The program is in desperate need of reform, and Congress is approaching the deadline for renewing the program in September 2017.

Repairing the NFIP is imperative for the California policyholders it serves, especially since that number is growing at a record pace. In December 2015, more than 27,000 new NFIP policies were written in California, resulting in the largest uptick in policies purchased during a one-month period in a state since Congress created the NFIP in 1968.

With more Californians holding flood insurance policies — coupled with El Niño-driven storms causing flood damage across the state — a tidal wave of claims are coming in from the Golden State to the National Flood Insurance Program. More than 125 claims have already been submitted this year, compared to the submission of only one claim during the same time frame a year ago.

That’s why it is more critical than ever for Congress to begin reforming the NFIP, which will cement the program’s long-term viability and benefit policyholders and taxpayers alike. Thankfully, there are several steps that lawmakers can take to ensure the NFIP remains a life raft for hundreds of thousands of California policyholders.

Creating an opportunity for more private insurers to enter the marketplace is a necessary first step. Currently, the flood insurance program doesn’t do enough to bolster competition in the marketplace. But doing so will result in lower rates and better coverage for consumers, which is already proving to be the case in states that have made similar changes, including Florida and West Virginia.

The House Financial Services Committee recently took an important step toward achieving this goal by passing bipartisan legislation aimed at providing private insurers an opportunity to enter the flood insurance marketplace. The Flood Insurance Market Parity Act will encourage the development of a private flood insurance market while giving states the right to regulate flood insurance.

Updating flood maps by using the most accurate risk assessment tools and modern technology available will also strengthen the NFIP. It will help lift the burden off of property owners for determining their own flood risks, and will also give more flexibility to the NFIP and private insurers to offer rates that accurately reflect the risk that a property faces.

In addition, enhancing storm mitigation efforts will go a long way toward making communities more resilient and better able to withstand major storms. Financial assistance should be made available to low-income property owners to assist them with strengthening their property. Offering incentives, such as reduced insurance rates, will also encourage proactive measures that will prevent damage and save lives while reducing recovery costs following a disaster.

Congress is running out of time to fix our nation’s broken federal flood insurance program. Without action soon, Californians may be unable to recover and rebuild following the next big storm.

Saks is the legislative director of the National Wildlife Federation and a member of the SmarterSafer coalition. For more information, visit