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1 1 (October 16, 2024)

handle is hein.crs/goverak0001 and id is 1 raw text is: Congressional aResearch Service ~ ~nforrning the legs lative debate since 1914 Closing the Flood Insurance Gap Updated October 16, 2024 There is a large flood insurance gap in the United States, where many people exposed to flood risk are not covered by flood insurance. Early estimates suggest that very few people had flood insurance in areas flooded by Hurricane Helene, perhaps 1%-2% or less in inland counties and 21% in coastal counties affected by Helene. The National Flood Insurance Program (NFIP) is the primary source of residential flood insurance. More than 22,000 communities participate in the NFIP, with more than five million policies providing more than $1.3 trillion in coverage. The NFIP identifies areas at high risk of flooding as Special Flood Hazard Areas (SFHAs). Property owners are required to purchase flood insurance only if(1) their properties are in SFHAs, (2) their communities participate in the NFIP, and (3) they have federally backed mortgages. However, the SFHA boundary may create a false belief that flood risk changes abruptly at the boundary and that properties outside the SFHA are safe and do not need flood insurance, but about 40% of NFIP claims are for properties outside SFHAs. The issue of high uninsured losses is not a new problem. For example, in the October 2015 South Carolina floods, the average NFIP penetration rate in counties with a federal disaster declaration was 5% (Table 1). Nearly 90% of policies in South Carolina were concentrated at the coast, but the flood damage was primarily inland, where few residents were insured (Figure 1). Congressional Research Service https://crsreports.congress.gov IN10890 CRS INSIGHT Prepared for Members and Committees of Congress - Likila-1