Both government and homeowners have parts to play in preventing flood damage and lowering flood risks, according to members of a panel hosted by the Bipartisan Policy Center, a non-profit organization addressing a variety of issues including housing and infrastructure.
"We're getting needless flood losses because the storm water systems aren't brought up to current requirements," said David Snyder, vice president, international policy, American Property Casualty Insurance Association. The government has unique abilities to address this issue through funding of disaster response and recovery, and creating and enforcing building codes, he added.
The insurance industry should work with the government on flood prevention, according to Snyder. "We need a true partnership where each partner uses the expertise and the tools that they have to achieve the desired result," he said.
Floods are inevitable, according to Julie Shiyou-Woodard, president and CEO of Smart Home America, an organization founded in 2007 that implements
Just as drivers expect that it's likely they will at some point have a car accident, homeowners' insurance policyholders should expect to eventually see flooding, according to Caitlin Sugrue Walter, senior vice president, research at the National Multifamily Housing Council.
"At any given time, there are flooding events around the country that are impacting places that didn't historically have any in the area," she said. "The mitigation is not as expensive as what you're going to pay in the aftermath."
Shiyou-Woodard pointed to Hurricane Helene hitting western North Carolina in September, as an example of a costly aftermath. "There are families there that will not recover because no one was in a flood risk zone. All of that was flooded. That means their homeowners policy is not covering that," she said. "Not many people in the United States have $500 in their account that would help them with a short term crisis. Imagine if you had to rebuild your entire life and you didn't have insurance for it. That's happening when we have severe weather events."
Still, mitigation can get expensive, Walter added. Light detection and ranging (LiDAR) technology exists to map soil and sand, for more accurate flood risk predictions, but it isn't readily available. "Consultants have it, and will work with a local community, but it goes back to where to get that money to pay for that. Getting that information into the hands of local communities would be very easy and very powerful in helping them plan," she said.
Regulators considering flood coverage rates and rules have to balance rate restrictions with making coverage available, as with other property coverages, stated Scott A. White, commissioner of the Virginia Bureau of Insurance and president-elect of NAIC, the national association of state insurance regulators.
"We're trying to balance, as regulators, the cost of coverage, along with making sure insurance companies are in a financial condition where they can pay claims, and that contributes to a safe and sound marketplace," he said.
