Washington, DC – May 25, 2022 – The SmarterSafer Coalition submitted the following comment letter to the NFIP hearing:
Dear Subcommittee Chair Cleaver and Subcommittee Ranking Member Hill:
SmarterSafer is a national coalition made up of a diverse chorus of voices which champions a united front for environmentally responsible and fiscally sound approaches to natural catastrophe mitigation and the promotion of public safety. SmarterSafer commends the House Financial Services Subcommittee on Housing, Community Development, and Insurance for holding this hearing and continuing to examine ways to improve the National Flood Insurance Program (NFIP). SmarterSafer believes that continued research, risk evaluation, mitigation strategies, and active engagement with the private sector will help promote an improved version of the NFIP in advance of a badly needed long-term reauthorization of the program.
The NFIP is a central part of the federal disaster response apparatus. The purpose of the NFIP is to offer affordable insurance coverage to property owners, renters, and businesses, including more than 5 million homeowners nationwide . The growing strength of floods and the storms that can cause them are increasingly straining the financial health of the NFIP. Over the past two decades, the program has been hit with major losses from a series of powerful storms forcing large scale payouts from the program, including Hurricane Katrina ($16. 2 billion), Hurricane Harvey ($8.9 billion), Superstorm Sandy ($8.8 billion), Hurricane Irene ($1.3 billion), and Hurricane Irma ($1 .1 billion), and more recently, Hurricane Ida ($ 1.5 billion).  Unfortunately, the situation has resulted in the Federal Emergency Management Agency ( FEMA ) paying out claims at an unsustainable rate, borrowing approximately $40 billion from U.S. taxpayers to date. 
Given that climate change and its impacts are spreading quickly across the country, it is almost impossible to predict where the next disaster will strike and how much that disaster will cost. That is why it is important for every community to be prepared for the mounting threats associated with climate-related flooding. As the subcommittee engages on NFIP-related conversations, SmarterSafer advocates for a long-term reauthorization to create a more consistent and stable financing regime. Our coalition believes that the use of modernized flood maps is the first step to combat flood risk properly and effectively. However, a comprehensive approach to combating flood risk should also look at the existing infrastructure and how additions to the infrastructure, specifically green and nature-based infrastructure, can help promote climate resilience. Floodplain management should not be static but instead should be allowed to change to fit the unique physical and economic circumstances of each community.
The conversations around the NFIP must include ways to prioritize and incentivize pre-disaster mitigation. Pre-disaster mitigation is a far more cost-effective approach than post-disaster recovery and rebuilding efforts. Additionally, 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.  These natural features will provide important wildlife habitats, assist in creating outdoor recreational opportunities, and help restore tourism activity. Investments into restoration and resilience projects 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.
SmarterSafer also firmly supports Risk Rating 2.0, which was recently implemented on April 1, as it better addresses premium pricing misalignments in measuring risk. Many communities  have come out in favor of Risk Rating 2.0, especially communities that see regular riverine flooding.  While evidence has shown that a significant number of NFIP policyholders will see lower rates with data-driven Risk Rating 2.0 premiums, we also believe it is important that the federal government bear in mind the impact that any unexpected premium increases could have on vulnerable populations.
While financially intimidating at first, there are many actions that can be done to make the NFIP and Risk Rating 2.0 a sustainable reality. Even though grants are available, many small communities do not have the capacity to apply for grants to start these projects. SmarterSafer recommends supporting grant writing and technical assistance through the NFIP to ensure that all communities have a fair chance at accessing these grants. Additionally, SmarterSafer supports creating a diverse range of grant sizes, large and small, to capture more communities at different levels and stages of their mitigation journey. SmarterSafer also suggests that Congress reexamine tax incentives to better promote and help communities maintain their mitigation measures. Lastly, Congress should strive to reward high mitigation standards that can serve as models for other communities to follow.
SmarterSafer recognizes the many years of bipartisan cooperation the Committee has invested in flood risk protection and reform of the NFIP. We applaud the thought and effort behind the National Flood Program Reauthorization Act of 2022 as it will help to ensure that at-risk communities are financially and physically protected against increasing flood risk. We also support the intent behind H.R. 7842 “The Protecting Families and the Solvency of the National Flood Insurance Program Act of 2022” introduced by Rep. Casten (D – IL), to facilitate an improved and more robust voluntary buyout process for NFIP policyholders. The coalition, however, does have concerns over legislative attempts to cancel the indebtedness of the N FIP and to impose caps on premium increases. Any such measures should only be considered if they are accompanied by meaningful programmatic reforms that move the NFIP towards financial solvency and actuarial rates that reflect the risk borne by policyholders.
We appreciate your consideration of the aforementioned suggestions to create a more sustainable NFIP that benefits policyholders, the environment, and taxpayers. We are confident that, with your leadership and dedication, we will see tangible change. As always, SmarterSafer stands ready to be a resource to the committee as it continues to work to safeguard NFIP.
2 https://www.iii.org/fact – statistic/facts – statistics – flood – insurance
3 https://www.banking.senate.gov/newsroom/minority/toomey – lets – use – nfip – reauthorization – as – an – opportunity – to – move – it – in – the – right – direction
4 https://coast.noaa.gov/data/nationalfacts/pdf/hand – out – natural – infrastructure.pdf
5 https://www.ducks.org/cons ervation/conserving – wetlands – waterfowl/the – many – benefits – of – wetlands – conservation
6 https://www.hannibal.net/opinion/letter – small – river – towns – need – risk – rating – 2 – 0 – for – nat ional – flood – insurance/article_3e6d6ae8 – c25a – 11ec – 9e19 – 676c2254cba1.html
7 https://www.thegazette.com/guest – columnists/flood – insurance – updates – are – long – overdue – for – iowa/
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.