Privatizing Flood Insurance in the United States: Options, Challenges, and Pitfalls

2019 ◽  
Author(s):  
Patricia Born ◽  
Robert Warren Klein
Keyword(s):  
United States ◽  
The United States ◽  
Flood Insurance

Examining Flood Insurance Claims in the United States: Six Key Findings

2015 ◽  
Vol 84 (3) ◽  
pp. 819-850 ◽  
Author(s):  
Carolyn Kousky ◽  
Erwann Michel-Kerjan
Keyword(s):  
United States ◽  
The United States ◽  
Flood Insurance ◽  
Insurance Claims

scholarly journals "Hurricane" Sandy

2018 ◽  
Vol 5 (2) ◽  
pp. 157-192
Author(s):  
Cheryl L. Pollak
Keyword(s):  
United States ◽  
New York ◽  
Local Governments ◽  
The United States ◽  
Hurricane Sandy ◽  
Small Business Administration ◽  
Mitigation Measures ◽  
District Court ◽  
Flood Insurance ◽  
Recent Experience

On the evening of October 29, 2012, “Hurricane” Sandy made land- fall on the New York coastline, battering the land with strong winds, torrential rain, and record-breaking storm surges. Homes and commercial structures were destroyed; roads and tunnels were flooded; and more than 23,000 people sought refuge in temporary shelters, with many others facing weeks without power and electricity. At the time, Sandy was heralded as one of the costliest hurricanes in the his- tory of the United States; the second costliest hurricane only to Katrina, which hit New Orleans in 2005. Unfortunately, recent experience with Hurricanes Florence, Maria, Harvey, and Irma suggest that this pattern of devastating superstorms may become the new norm as climate change produces more extreme and unpredictable weather events. In Sandy’s aftermath, as individuals returned to their homes, or what remained of them, and communities began to rebuild, the true cost of the storm became apparent. A year after the storm, the Federal Emergency Management Agency (“FEMA”) estimated that over $1.4 billion in assistance was provided to 182,000 survivors of the dis- aster; another $3.2 billion was provided to state and local governments for debris removal, infrastructure repair, and emergency protective measures. More than $2.4 billion was provided to individuals and businesses in the form of low-interest loans through the Small Business Administration (“SBA”), and millions more were spent on grants de- signed to implement mitigation measures in the future and to provide unemployment assistance to survivors. Before the storm, homeowners paid premiums for flood insurance provided through the National Flood Insurance Program (“NFIP”), and for homeowner’s insurance provided by dozens of private insurers. In the months following the storm, they began to file claims for assistance in rebuilding their homes. While many such claims were re- solved successfully, many homeowners were unhappy with the settlement amounts offered by their insurance carriers and felt compelled to file lawsuits in the surrounding state and federal courts. Many of those lawsuits were filed in the United States District Court for the Eastern District of New York (“EDNY”). This case study describes the EDNY’s specifically crafted, unique approach to handling the mass litigation that ensued from Sandy’s devastation, documents some of the problems that the Court faced during that mass litigation, and describes some of the lessons learned from the Court’s experience.

scholarly journals Addressing Affordability in the National Flood Insurance Program

2014 ◽  
Vol 01 (01) ◽  
pp. 1450001 ◽  
Author(s):  
Carolyn Kousky ◽  
Howard Kunreuther
Keyword(s):  
United States ◽  
The United States ◽  
Hurricane Sandy ◽  
Flood Insurance ◽  
National Flood Insurance Program ◽  
Voucher Program ◽  
Insurance Program ◽  
Loan Program ◽  
Flood Prone Areas

There is often tension between setting insurance premiums that reflect risk and dealing with equity/affordability issues. The National Flood Insurance Program in the United States recently moved toward elimination of certain premium discounts, but this raised issues with respect to the affordability of coverage for homeowners in flood-prone areas. Ultimately, Congress reversed course and reinstated discounted rates for certain classes of policyholders. We examine the tension between risk-based rates and affordability through a case study of Ocean County, New Jersey, an area heavily damaged by Hurricane Sandy. We argue that the NFIP must address affordability, but that this should not be done through discounted premiums. Instead, we propose a means-tested voucher program coupled with a loan program for investments in hazard mitigation.

scholarly journals The Floodplain Fiasco

2014 ◽  
Vol 2 (1) ◽  
pp. 53-71
Author(s):  
Andrew J. Kubiak
Keyword(s):  
United States ◽  
Computer Technology ◽  
The United States ◽  
Flood Insurance ◽  
The People ◽  
Property Owners ◽  
Flood Inundation Mapping ◽  
Proactive Measures ◽  
Reduced Rate ◽  
Bodies Of Water

Flooding has long been a source of hardship for the people who work and live near bodies of water such as rivers, lakes, and streams. The United States has not been an exception. Only in recent decades has the United States taken proactive steps in an effort to mitigate the damage associated with flooding. These proactive measures predict the areas of the United States that flood, and require that people who live within those areas to purchase flood insurance. These predictions are in the form of a nationwide system of maps. Until recently, flood insurance was offered to affected property owners at a reduced rate. The nationwide system of maps indicate the potential limits of flooding however these maps are plagued by systematic errors, which reduce their accuracy to the point where the flooding limits indicated on the maps are almost, if not completely, meaningless. These errors are caused by the use of stormwater runoff rates that are based on existing conditions, the use of computer technology that cannot accurately model the effects of structures impeding the flow of stormwater, and the use of survey equipment that does not accurately model the terrain that forms the basis of these limits of inundation. For these reasons, the proposition of this Article is that the way flood insurance is managed should be changed. This Article also proposes several possible solutions to the problem of flood inundation mapping.

scholarly journals Atmospheric rivers drive flood damages in the western United States

2019 ◽  
Vol 5 (12) ◽  
pp. eaax4631 ◽  
Author(s):  
Thomas W. Corringham ◽  
F. Martin Ralph ◽  
Alexander Gershunov ◽  
Daniel R. Cayan ◽  
Cary A. Talbot
Keyword(s):  
United States ◽  
Fold Increase ◽  
The United States ◽  
Flood Damage ◽  
Western United States ◽  
Flood Insurance ◽  
The West ◽  
Atmospheric Rivers ◽  
Insurance Program ◽  
Flood Damages

Atmospheric rivers (ARs) are extratropical storms that produce extreme precipitation on the west coasts of the world’s major landmasses. In the United States, ARs cause significant flooding, yet their economic impacts have not been quantified. Here, using 40 years of data from the National Flood Insurance Program, we show that ARs are the primary drivers of flood damages in the western United States. Using a recently developed AR scale, which varies from category 1 to 5, we find that flood damages increase exponentially with AR intensity and duration: Each increase in category corresponds to a roughly 10-fold increase in damages. Category 4 and 5 ARs cause median damages in the tens and hundreds of millions of dollars, respectively. Rising population, increased development, and climate change are expected to worsen the risk of AR-driven flood damage in future decades.

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