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Speak Up for Flood Insurance Reform

Supporting Flood Insurance Reform

Legislative Update: The Flood Insurance Reform and Modernization Act of 2011 awaits action by the full Senate. It unanimously passed the Senate Banking Committee, and the House passed its version last year by a vote of 406-22. The flood insurance program will end on July 31, 2012 if the Senate does not take action. Contact your U.S. Senators to urge their support for this legislation and ask them to call on Majority Leader Reid to bring the legislation to the floor for debate and a vote.

Before a Senate Banking Committee hearing on May 9, 2012, Sarah Murdock, a Senior Policy Advisor from The Nature Conservancy, testified about the urgent need for the Senate to act on flood insurance reform. Read her full testimony


The National Flood Insurance Program (NFIP) makes flood insurance available to coastal and inland property owners for structures mapped in areas of flood risk. However, this program is currently over $18 billion in debt and is in need of serious reform.

During the first decade of this century, federal funding spent on flood damages has increased to an annual average of over $10 billion1, a 2.5-fold increase from the 1950s. Results from scientific studies indicate that a changing climate has exacerbated extreme weather events, including flooding and coastal storms. Under any plausible scenario, costs associated with extreme weather events will rise. Without significant reform, the NFIP will not be sustainable and American taxpayers will continue to be asked to bailout the program and subsidize public and private development in flood risk areas.

Much of the program’s debt is due to flood insurance premium rates being charged that do not reflect the true risk to structures in flood zones, lack of public awareness about the risk of living in flood hazard areas, and the low emphasis placed on implementing mitigation measures that would greatly reduce the cost of flood damage.

What Flood Insurance Reform Does


The Flood Insurance Reform and Modernization Act of 2011 will phase out subsidies that have undermined the financial stability of the flood insurance program. It will require the Federal Emergency Management Agency (FEMA) to ensure maps are updated and accurate so that people understand and can better prepare for their risks, and it will streamline and strengthen mitigation programs to help decrease flood risks and better protect flood-exposed communities and homes and businesses.

Nature-Based Solutions


When left in place, coastal marshes, sand dunes and inland wetlands can serve important flood- and storm-control purposes. Under current policy, however, a dangerous loop is in play: development in coastal zones and in freshwater floodplains puts people and property at risk, and it simultaneously facilitates the destruction and degradation of the natural systems that provide a natural defense to people and properties. The current policy also subsidizes redevelopment in risk zones, not properly incentivizing natural restoration.

Recent studies show that one of the most cost-effective solutions to protect people from the impacts of climate change will be to preserve, enhance and restore the natural systems that deliver critical protection from sea level rise, storm surge and coastal and inland flooding. One study found that for every dollar spent on flood mitigation five dollars are saved2. In addition to flood control, ecosystems provide many services that support and protect humans and nature such as filtering pollutants, flood and erosion protection, production of fish and shellfish.

Instead of advancing opportunities to conserve or restore the function of natural systems that benefit both people and nature, the NFIP often inadvertently advances a scenario where additional development increases risk to individuals and communities while also eroding the value of natural systems and the benefits they provide.

Under a predicted increasingly destabilized climate, the magnitude of the issue grows considerably when factoring in impacts such as rising sea levels and more frequent intense storms and precipitation patterns. Unfortunately, “hard” solutions to mitigate flooding, such as seawalls and levees, are default strategies—thus exacerbating the degradation to natural systems.

Broad Support

A diverse group of people from across the political spectrum agree that changes are needed to the NFIP. The Nature Conservancy is a member of the SmarterSafer Coalition along with natural partners such as such as American Rivers and the National Wildlife Federation, but also alongside free-market think tanks such as the Competitive Enterprise Institute and Taxpayers for Common Sense as well as insurance interests like Swiss Re.

Use Your Outside Voice to call your Congressman, write to your Senator or attend a town hall meeting.

1Adjusted to 1999 dollars
2Multihazard Mitigation Council, ”Natural Hazard Mitigation Saves: An Independent Study to Assess the Future Savings from Mitigation Activities,” Multihazard Mitigation Council and Rose, A. et al. 2007. Benefit-Cost Analysis of FEMA Hazard Mitigation Grants. Natural Hazards Review 8, 97.

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