WASHINGTON, D.C. – Today, Rep. Scott Peters (CA-52) and Rep. Andy Barr (KY-06) introduced the bipartisan Build for Future Disasters Act to end the costly system of building, flooding and rebuilding perpetuated by the National Flood Insurance Program (NFIP).

The Build for Future Disasters Act would end NFIP subsidies for newly constructed properties in areas vulnerable to flooding. Newly constructed properties built during 2025 or later would be subject to rates that reflect up-to-date flood risk information and will not later qualify for a subsidy, and structures built before 2025 in flood zones or that are re-mapped into flood zones would still be eligible for grandfathering subsidies. The bill also requires the U.S. Government Accountability Office to study the feasibility and implications of lowering all subsidies to a point that puts the NFIP on a path to stronger financial footing. Together, this would reduce taxpayer burden, stop growing government risk and put an end to the implication that if insurance is cheap, the risk must be low. 

“Back in 2010, when I was chair of the Climate Initiative for the San Diego Foundation, we commissioned research on the climate change impacts San Diego would face in the coming years. Sea-level rise and coastal flooding ranked in the top three,” said Rep. Peters. “Right now, federal taxpayer money is subsidizing the rebuilding of structures where we know they will be destroyed again, costing more taxpayer money and creating extensive suffering. This bill would put an end to that and would instead encourage regional resiliency planning – crucial as we prepare for the climate crisis-induced disasters of the future.”

“Our bill reforms the NFIP to give taxpayers a better deal,” said Rep. Barr. “Congress must restructure the NFIP to rely on more accurate and recent floodplain maps to ensure taxpayers are not footing the bill for construction or rock bottom insurance rates in areas dangerously prone to flooding. NFIP’s consistent budget deficits in recent years highlight the need for this bipartisan reform, and I look forward to working with Congressman Peters to pass this reform bill in the House.”

The NFIP offers flood insurance to property owners, renters and businesses at discounted rates. The NFIP relies on flood insurance rate maps that draw from past experience and, for the most part, disregard the future. While the flood zone maps determine who is obligated to carry flood insurance in any given year and may be useful in setting a single year’s flood insurance rates, it does not account for the potential worsening of disasters in following years. Such an underestimation can mislead communities, developers and property owners about the real risk of flooding and results in short-sighted building within flood-prone areas.

These deceptive price signals have also led the program into significant debt. Currently, the NFIP runs a $1.4 billion deficit each year and causes a great financial loss for American taxpayers who fund the program.

"If the private sector looks at future flood risk when pricing insurance, why shouldn’t the federal government? The current system cheats taxpayers and hides the cost of flooding from homebuyers in perpetuity,” said Craig Fugate, former FEMA Administrator. “This legislation would go a long way toward tackling that problem by ensuring federal insurance for new construction in flood-prone areas reflects real flood risk.”  

“The Build for Future Disasters Act of 2020 calls on communities, builders, and homebuyers across the country to be smarter about flood risk and how that risk is changing,” said Laura Lightbody, director of The Pew Charitable Trusts’ flood-prepared communities initiative. “Homes built today should be constructed to withstand tomorrow’s floods, not simply follow the lines of today’s flood map. This bill would help shore up the debt-ridden National Flood Insurance Program; even more importantly, it would help reduce risky development in flood-prone areas.”

“In the past few years, we’ve seen communities from coast to coast devastated by an increasing number of catastrophic flooding events,” said Jimi Grande, senior vice president of government affairs for the National Association of Mutual Insurance Companies (NAMIC). “NAMIC believes the most effective way to ensure millions of Americans can continue to rely on a functioning National Flood Insurance Program is to align the program’s rates with actual risk, which would increase the choices and the availability of flood insurance for policyholders, give policyholders a more accurate picture of their true flood risk, and would put the indebted NFIP on a path towards fiscal solvency.  In this vein, NAMIC applauds the leadership of Reps. Peters and Barr for their work in introducing the Build for Future Disasters Act, which would take tangible steps to align flood insurance rates with actual risk, better protect policyholders, and put the NFIP on stronger fiscal footing.”  

?The bill is supported by Pew Charitable Trusts, National Association of Mutual Insurance Companies (NAMIC), Natural Resources Defense Council (NRDC) and R Street Institute.