Most U.S. properties exposed to significant flood risk remain uninsured despite increasing flood losses nationwide, according to a new report by the Government Accountability Office.
Approximately 86% of high-risk properties lack National Flood Insurance Program, or NFIP, coverage, and the Federal Emergency Management Agency’s current flood-mapping framework leaves millions of at-risk properties outside the mandatory flood insurance purchase requirement, GAO said.
The report concluded that the mandatory purchase requirement is the primary driver of flood insurance uptake, but FEMA-designated Special Flood Hazard Areas, or SFHAs, generally do not capture all sources of flood risk, particularly flooding caused by heavy rainfall.
GAO estimated that roughly 13 million high-risk properties fall outside FEMA-mapped SFHAs, meaning many properties facing substantial flood exposure are not subject to federal flood insurance requirements.
To increase flood insurance participation, GAO recommended that Congress consider:
- Updating mandatory purchase requirement criteria to account for all sources of flood risk, including pluvial (rainfall-related) flooding;
- Directing FEMA to make property-level flood risk information publicly available;
- Requiring lenders making federally backed mortgages to provide flood insurance quotes and obtain signed disclosures when borrowers decline coverage;
- Increasing NFIP coverage limits, which have remained unchanged since 1994.
GAO also reiterated its prior recommendations to replace broad premium subsidies with targeted affordability assistance and remove barriers to private flood insurance growth.
