WASHINGTON—Are floods getting worse for America’s National Flood Insurance Program (NFIP)? According to evidence presented in a new blog posted today by Resources for the Future (RFF), costly flood events may be becoming more common. In the US, for instance, 2017 may become the second most expensive on record for the NFIP.
In the new blog, Are Floods Getting Worse for the National Flood Insurance Program?, authors RFF Visiting Fellow Carolyn Kousky of the Wharton School of Economics and Wharton School of Economics Senior Research Coordinator Brett Lingle note, “The ability to access capital to pay claims in these severe-loss years is a critical challenge for disaster insurance. The NFIP’s current financial predicament illustrates this: claims from the 2005 hurricane season plunged the program into debt from which it has been unable to recover. In 2005 alone, the NFIP paid out more in losses than it had over the life of the program to that point. Hurricane Sandy created another severe loss year in 2012 and, as noted, 2017 now looks like it will come close to rivaling 2005 in terms of NFIP claims.”
The authors conclude: “Scientists project increasing flood risk in the years to come—due to where and how society builds as well as climatic changes. … Going forward, the NFIP needs to develop a robust financing strategy for high-loss years. Communities and households also need to invest more heavily in measures to reduce flood risk that can both help keep costs down and protect communities.”
Read the full blog: Are Floods Getting Worse for the National Flood Insurance Program?