EDITORIAL: Flood program needs reform

Oct. 10--The damage assessments are still coming in, but one thing seems clear: Hurricanes Harvey, Irma and Maria blew away any lingering doubts about the need to fix the National Flood Insurance Program.

The White House has already sent Congress its first budget request for hurricane cleanup, and more than half of the $29 billion will go toward flood insurance claims. (Without an appropriation, the program will run out of money sometime in the next few weeks; before Harvey and Irma, the NFIP was already $25 billion in debt.) That sticker shock should prompt lawmakers to examine the weaknesses and flaws of a program that covers fewer than half the people who need it -- while encouraging rebuilding, over and over again, in areas known to be vulnerable to floods.

It's past time for reform.

Start with the reality that many Americans don't even know what flood insurance is -- or understand that their homeowners' policies don't protect them against many kinds of water damage, particularly in flood zones. As a result, a significant chunk of the losses from a rain-heavy event like a hurricane are not covered by any insurance at all; in Texas, more than 70 percent of damaged homes weren't covered. Floridians are more savvy, with nearly 1.8 million policies in force as of 2016, more than any other state. Still, fewer than half the properties vulnerable to a flood have insurance.

Those Floridians understand what a good deal flood insurance is. In fact, it's too good. Rates have been kept artificially low for decades, suppressed by Americans' insatiable desire to live in coastal areas without assuming all the risk that comes with it. Flood insurance costs about half of what it should, to cover the more than $1 trillion in risk from the policies currently in force.

"The NFIP is simply not fiscally sustainable in its present form," said President Trump's budget director Mick Mulvaney last week. He's right.

In that letter, Mulvaney sketched out a road map for reforms. They include phasing out the availability of cheap, subsidized insurance for new construction, starting in 2020; bolstering the availability of private flood insurance, which is prohibitively expensive; cutting off policies for properties that flood again and again and writing off up to $16 billion of the NFIP's debt to clear the decks for reform.

One smart solution would be to reward property owners who take measures to mitigate flood damage, such as elevating their buildings' foundations, with lower rates. At the same time, local leaders must acknowledge that it's not fair to ask taxpayers who live in non-flood zones to pick up the bill --or, in the case of some properties, bill after bill after bill -- for those who want to live where the waters are likely to rise again.

This editorial first appeared in the Daytona News Journal, a News Herald sister paper with Gatehouse Media.

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