The next flood

摘要

In "Reauthorizing the National Flood Insurance Program" (Issues, Winter 2018), Howard C. Kunreuther raises several points that are germane to the Insurance Information Institute's mandate to "improve public understanding of insurance-what it does and how it works." One point in particular goes to the heart of why my organization believes that the pending renewal of the National Flood Insurance Program (NFIP) presents an ideal opportunity to modernize the program. After 50 years of existence, the NFIP has become financially unsustainable (per a report from the US Government Accountability Office). Yet even with the NFIP as a backstop against a total loss, an average of only 14% of the 3.3 million households in counties declared federal disaster areas after Hurricane Irma ravaged Florida in September 2017 had NFIP coverage. Equally frustrating are the reasons why many people decline to purchase coverage, including a lack of awareness that flood-caused damage is not covered under their homeowners, renters, or business policies; underestimating flooding risk; and the cost of coverage.