SmarterSafer Coalition Releases Public Comment Letter on NFIP to FEMA

SmarterSafer Coalition Releases Public Comment Letter on NFIP to FEMA

Washington, DC – December 23, 2021 — The SmarterSafer Coalition shared the following public comments to FEMA Administrator Deanne Criswell regarding the NFIP:

Dear Administrator Criswell:  

SmarterSafer is a national coalition made up of a diverse chorus of voices who champion a united front for environmentally responsible and fiscally sound approaches to natural catastrophes and policies that promotes public safety. SmarterSafer commends the Federal Emergency Management Agency (FEMA) for seeking input on improvements to the National Flood Insurance Program’s (NFIP) floodplain management standards and suggestions on minimizing the program’s impact on endangered species and their environments. SmarterSafer believes that regulatory action, information sharing, continued research, and active engagement with the private sector will help add momentum to ideas and policy proposals to promote a  stronger NFIP that protects taxpayers, the environment, and communities nationwide.  

As you well know, NFIP is a central part of the federal disaster response apparatus. NFIP is also intended to encourage communities to adopt and enforce floodplain management regulations, yet it remains the only federally subsidized program that incentivizes people to build and live in harm’s way. The growing strength of floods and hurricanes is increasingly straining the financial health of NFIP. Over the past two decades, the program has been hit with major losses from a series of powerful storms, including Hurricane Katrina ($16.3 billion), Hurricane Harvey ($8.9  billion), Superstorm Sandy ($8.8 billion), Hurricane Irene ($1.3 billion), and Hurricane Irma ($1  billion), and more recently, Hurricane Ida ($65.5 billion). Unfortunately, the situation has resulted in FEMA paying out claims at an unsustainable rate, borrowing approximately $40 billion from U.S. taxpayers to date. 

Given that climate change is impacting all parts of our nation, it is essential that every community be better prepared for associated threats, especially flooding. More needs to be done by NFIP and participating communities to protect structures, particularly those built in special flood hazard areas (SFHA). Flood intensity continues to increase, meaning that SFHA  management requirements must be more forward-looking. SmarterSafer urges FEMA to continue to update and require higher freeboard standards and rely on updated flood maps and advanced metrological research to make final decisions. We also believe it necessary that FEMA incorporate forward-looking climate data into base floodplain management standards. There is a plethora of climate and natural disaster risk information across the federal government, the private sector, and non-profits. Improved information sharing and stronger partnerships with the private sector will enhance the ability for FEMA to assess flood risk and, more broadly, create a uniform catastrophe modeling system to uncover climate-related risks and assess the impact those risks have on the NFIP and other federal disaster recovery programs. 

SmarterSafer also advocates for the use of better and modern flood maps as an important step in properly and effectively communicating and underwriting flood risk. A comprehensive approach to combating flood risk should also look at existing infrastructure, including the ways in which infrastructure improvements inside a floodplain may promote resiliency and the ability of green or nature-based infrastructure to mitigate flood damage. Floodplain management should not be static but rather should change to fit the different circumstances facing distinct communities. 

Pre-disaster mitigation is a far more cost-effective approach than post-disaster recovery and rebuilding efforts. It is estimated that mitigation efforts save up to $13 for every $1 invested. Nature-based mitigation efforts, including the restoration of wetlands, dunes, and other coastal barriers, make communities more resilient to increased flood risk. NOAA estimates that U.S. coastal wetlands alone provide $23.2 billion in storm protection each year. During Hurricane Sandy, wetlands reduced damages by more than 22 percent in more than half of the areas directly affected by the storm. On inland waterways, researchers have found that wetlands provide $237 billion a year in benefits for flood mitigation and groundwater recharges. Investment in natural restoration and resilience projects will provide important wildlife habitats, assist in creating outdoor recreational opportunities, and help restore tourism activity. Investments into restoration and resilience projects in U.S. floodplains will also help confront the climate crisis by naturally sequestering more carbon and bolstering community resilience to wildfires, hurricanes, and flooding, while advancing environmental justice by removing pollution from our air, water, and soils. Greater emphasis needs to be placed on natural infrastructure and the surplus of benefits available when used in tandem with gray infrastructure. 

Beyond investment in resilient infrastructure, FEMA must take additional steps to ensure that all communities can benefit from sound floodplain management practices. Despite the availability of FEMA floodplain management grants, the reality is that many small, rural, and vulnerable communities often lack the capacity to apply for grants or implement best practices. SmarterSafer recommends that FEMA prioritize grant writing and technical assistance, including on mitigation plans, to allow the communities most in need the opportunity to take advantage of every aspect these programs have to offer. FEMA should also reconsider any regulations that prevent vulnerable communities from making flood mitigation improvements. Additionally, SmarterSafer supports creating a diverse range of grant sizes, large and small, to capture more communities at different levels and stages of their strategic mitigation efforts. SmarterSafer also suggests that the federal government and Congress consider tax incentives to help communities implement more resilient floodplain mitigation measures. Lastly, FEMA should look to rewarding high standards which would serve as a model for other communities to follow.  

SmarterSafer also firmly supports Risk Rating 2.0 and views it as a crucial step in addressing premium pricing to better reflect risk. While evidence has shown that a number of NFIP policyholders will see a change in their rates, it is important to note that many will see a decrease, thereby adjusting the NFIP away from the heavily subsidized program of yesterday. 

The legacy NFIP risk rating methodology offers a cross-subsidization from lower income to higher income policyholders, and we firmly believe full implementation of Risk Rating 2.0 will help correct that imbalance.  

That said, we also believe it is important that FEMA continue to bear in mind the impact that any unexpected premium increases could have on vulnerable populations. Thus, premium changes should be paired with means testing and other programs to ensure that all who need insurance are able to access it and that those in higher-risk areas with more expensive structures pay their fair share. We also believe that FEMA should reconsider regulation on multiple-loss properties. As stated in the Request for Information, one of every six dollars paid in NFIP claims go to multiple loss properties. Given the financial predicament of the NFIP, this figure is unsustainable. Multiple loss properties should be required to invest claims in sustainable building and retrofitting, and FEMA should consider enhanced voluntary buyout programs. In an effort to curb the number of potential future multiple loss properties, SmarterSafer has also endorsed legislation that would prohibit new construction inside floodplains. Additionally, we support mandatory disclosure of flood risk as a contingency for the sale of any property inside a SFHA. Such steps must be taken, legislatively or through regulation, to offer greater protection to policyholders, the environment, and U.S. taxpayers. All stakeholders also benefit from FEMA’s risk transfer program; SmarterSafer recognizes that the purchase of reinsurance to offset losses protects taxpayers and the solvency of the NFIP. 

We hope that you will continue to focus your time and efforts on these topics and appreciate your consideration of the aforementioned suggestions to create a more sustainable National Flood Insurance Program. We also hope that, with your dedication, we will continue to see tangible change. As always, SmarterSafer stands ready to be a resource to FEMA as it continues to enhance NFIP. 


SmarterSafer Coalition  


About SmarterSafer

SmarterSafer is a national coalition made up of a diverse chorus of voices united in favor of environmentally responsible, fiscally sound approaches to natural catastrophe policy that promote public safety. SmarterSafer members include taxpayer advocates, environmental groups, insurance interests, housing organizations, and mitigation advocates. For more information from SmarterSafer, be sure to follow us on Twitter.