The National Flood Insurance Program (NFIP) is the primary source of flood insurance for households and businesses in the United States. Congress created the NFIP in 1968 in response to devastating floods, increasing federal disaster costs, and a lack of flood coverage in the private market. Since then, the program has worked with participating communities to identify and map flood risk, encourage flood risk reduction through the adoption of floodplain management standards, and reduce the cost of disasters by providing insurance and grants for hazard mitigation.
While nearly every community at risk of flooding has joined the NFIP – adopting floodplain regulations and making insurance available to their residents – the program faces myriad challenges. Catastrophic events, increasing development in flood prone areas, and other structural limitations have pushed the program into massive debt. Flood maps too often fail to accurately depict flood risk, while subsidies and rating practices distort risk perceptions. Some policyholders pay rates far below their actual risk, while those who struggle to afford coverage receive no assistance. The NFIP has been on the Government Accountability Office’s High-Risk list for more than a decade and the need for reform has generated significant debate among policymakers.
The Wharton Risk Center conducts the research and analysis needed to adequately understand the NFIP’s shortcomings and provide policymakers the information needed to make effective reforms. Our research spans more than 30 years and covers nearly every aspect of the program, including flood hazard mapping and risk communication, rate-setting and financing catastrophic losses, insurance affordability, and flood risk-reduction.
Flood Hazard Mapping and Risk Communication
- Structure Specific Flood Risk Based Insurance Proof of Concept and Preliminary Analysis
- Understanding Individual Flood Risk Perceptions and Flood Insurance Choices to Build More Resilient Communities: A Survey of New York City Residents
Rate-Setting and Financing Catastrophic Flood Events
- Financing Flood Losses: A Discussion of the National Flood Insurance Program
- The Pricing of Flood Insurance
- Pricing storm surge risks in Florida: Implications for determining flood insurance premiums and evaluating mitigation measures
- Examining Flood Insurance Claims in the United States: Six Key Findings
- Is flood insurance too expensive?
- Why Fairness Matters in Reforming Flood and Health Insurance Programs
- Affordability of the National Flood Insurance Program: Application to Charleston County, South Carolina
- Encouraging Adaptation to Flood Risk: The Role of the National Flood Insurance Program
- Post-Flood Mitigation: The NFIP’s Increased Costs of Compliance (ICC) Coverage
- Learning over time from FEMA’s Community Ratings System (CRS) and it’s link to flood resilience measurement
- Does Federal Disaster Assistance Crowd Out Flood Insurance?
The Private Flood Insurance Market