NAMIC: Flood Mitigation Means Reducing Losses, Increasing Affordability

Congress can best help homeowners at risk of flooding by funding mitigation and loss reduction projects that better protect homes and communities, the National Association of Mutual Insurance Companies told lawmakers today.

In testimony submitted to the House Financial Services Subcommittee on Housing and Insurance, the association outlined the property/casualty insurance industry’s efforts to better understand flooding – which is among the most common natural disasters with all 50 states and 99 percent of counties across the country having experienced a flood event in the last 20 years – and to protect property owners through the National Flood Insurance Program.

“We can’t control the weather, but America’s mutual insurers have invested millions of dollars to study how flooding and extreme weather impact us, and how we can minimize and mitigate against that impact,” said Jimi Grande, senior vice president of federal and political affairs at NAMIC. “Smart investments in mitigation against that water will save lives, properties, and taxpayer dollars – the insurance industry is unparalleled in our commitment to investing in that prevention.”

The committee hearing was especially focused on properties that have repeatedly flooded, a significant problem for the NFIP. NAMIC’s testimony noted that such properties account for 1 percent of policies in the NFIP but 25 percent of claims in a given year. Addressing the problems facing those properties – and any others – before flooding occurs can have a significant impact in reducing those losses, NAMIC said, as studies have shown every dollar invested in loss prevention can save up to $13 in reduced future losses. Additionally, NAMIC voiced support for continued subsidies for flood insurance in cases of need but encouraged greater transparency in communicating flood risk to homeowners.

“The challenges of extreme weather and flood risk are ones that insurance alone cannot solve,” Grande said. “Homeowners should know the real risks of where they either already live or are considering living. Effective solutions will require sustained commitments from everyone – homeowners, communities, regulators, and state and federal lawmakers – to reduce the risk and costs of insurance by better protecting our communities.”