Not usually the fodder for headlines, insurance has been in the news in recent weeks as a growing list of private insurers have stopped offering homeowners’ policies in California and Florida. Companies see the risk of climate-driven wildfires, rising sea levels and increasingly intense storms as too much for their bottom lines.
Yet another type of homeowners’ insurance may be even more consequential, for both people and the environment.
Climate change is fueling more extreme weather events, causing many private insurers to refuse to write policies that cover housing and other development in floodplains, or to charge prices that few can afford. That’s hardly surprising — floodplains predictably tend to flood. In response, the federal government has stepped in to not only offer insurance for development in high-hazard zones but to charge far less than market rates.
It’s easy to guess how this is playing out. The availability of subsidized insurance has encouraged building in flood zones across the country. Payouts for flood damage — sometimes multiple times for the same properties — have saddled taxpayers with an outstanding bill of more than $20 billion.
Beyond its staggering financial costs, development in floodplains causes added impacts to both other species and human communities. Many endangered species, ranging from salmon in the Pacific Northwest to tiny Key deer in Florida, depend on healthy watersheds and coastal wetlands. These features also help protect people by absorbing floodwaters and storm surges; experts estimate that intact coastal wetlands prevented over $600 million in property damage from Hurricane Sandy alone.
Simply put, building in floodplains destroys sensitive habitat and puts people and property in danger.
The federal government is slowly implementing reforms to its flood insurance program. The Federal Emergency Management Agency (FEMA), which implements the program, is changing its rate structure to better reflect flood risk and rebuilding costs, as well as to increase fairness by reducing subsidies to wealthy owners of second homes.
In my home state of Oregon, a federal fisheries agency ordered FEMA to make other changes to protect endangered salmon, including updating maps to accurately identify flood hazard areas in an era increasingly prone to climate disasters and requiring communities to increase their zoning protections for floodplains to remain eligible for low-cost insurance.
Unfortunately, both external and internal resistance threatens these commonsense reforms. Ten states have filed a lawsuit to try to derail flood insurance rate reforms, and developers, politicians and FEMA itself are dragging their feet instead of implementing protections for endangered salmon. FEMA has also ignored the effects of its insurance program on most endangered species outside of the Northwest.
In addition to well-worn complaints about added costs, today opponents of modernizing flood insurance have a new talking point: the urgent need for affordable housing. We must indeed increase housing, particularly for underserved and historically marginalized communities and those experiencing homelessness. But putting homes for these already vulnerable citizens in areas exposed to growing climate risks conflicts with the goals many environmental justice advocates are working toward.
The 75th anniversary of the 1948 Vanport flood along the Oregon-Washington border, which killed 15 people and obliterated what was then Oregon’s largest Black community, should serve as a stark reminder of where notto build housing.
Political leaders, FEMA and municipalities across the country should embrace rather than fight flood insurance reforms. These changes can help protect valuable wetlands recently placed in harm’s way by the U.S. Supreme Court Sackett v. EPA decision that narrowed protections under the Clean Water Act. They can also encourage communities to accelerate “managed retreat” from areas increasingly vulnerable to flooding as violent storms become more common.
The turmoil in both private and government insurance is a wake-up call, telling us we need to take steps to adapt to disasters fueled by climate change. Improving protections for floodplains will help recover endangered species, better protect people and communities, and save taxpayers money.
That’s a triple bottom line we can’t afford to pass up.
Daniel J. Rohlf is a law professor at Lewis and Clark Law School in Portland, Oregon, and a member scholar at the Center for Progressive Reform.