After 35 years in the flood insurance business, we’ve seen flood risk evolve, and we’ve been at the forefront of helping the industry adapt and meet the ongoing challenges of flood prevention and management. Today, we face a new set of threats. And they may not all be what you expect.

Here’s a look at the four biggest factors threatening flood prevention and management in 2020.

Climate change is causing sea-level rise and extreme weather, increasing flood risk across the country. The Intergovernmental Panel on Climate Change created a report on climate extremes and found that climate change “has detectably influenced” the water-related factors that contribute to flooding, such as snowmelt and rainfall.

Almost no area of the United States is immune to these changes. The Climate Science Special Report noted that flooding has increased in the Mississippi River Valley, Midwest, and Northeast, and flooding has already doubled in coastal areas in just a few decades.

It’s likely that climate change will continue to exacerbate flooding. According to FEMA’s climate change report…

• Floodplains will grow between 40 and 45 percent by 2100.
• We’ll see an 80 to 130 percent increase of required NFIP flood insurance policies.
• The average loss cost per policy will increase by 50 to 90 percent.

The National Flood Insurance Program (NFIP) plays a crucial role in mitigating flood loss. It paid an average of $2.9 billion per year between 2007 and 2017 toward flood losses. When major storms happen, the NFIP pays out even more (about $8.8 billion for each Hurricane Sandy and Hurricane Harvey).

Despite this, Congress has still not authorized NFIP for the long term. Since 2017, the NFIP has gone through more than a dozen short-term extensions. In June 2019, a proposal to authorize the NFIP for five years advanced out of the House Financial Services Committee in a 59-0 vote, an encouraging sign of bipartisanship.

Since then, though, the bill has stagnated. In December 2019, the president granted yet another temporary authorization, which is set to expire on September 30 of this year.

This puts the NFIP in a vulnerable position and could spell financial disaster for millions. Without authorization, the NFIP wouldn’t be able to write new policies or issue renewals. It would also impact real estate transactions, about 40,000 closings per month, since many deals can’t go through without proof of flood insurance. 

FEMA would still be able to pay out valid claims with available funds, but its ability to procure new funds from the Treasury could be greatly reduced. This means that property owners with insurance may not be able to collect benefits and recover after a flood event.

NFIP is the primary source of flood insurance for homeowners. It covers 22,000 communities in 56 states and jurisdictions. Its more than five million flood insurance policies provide homeowners with more than $1.3 trillion in coverage. A lapse in authorization would cause untold financial damage, especially in light of increasing flood risk.

One of the reasons we’re able to respond so quickly to flood events is because we’re always prepared. We do this by constantly monitoring and responding to the best weather forecast modeling available. 

So what happens if that accuracy of our weather prediction technology is suddenly disrupted? Scientists at NOAA, NASA, and the American Meteorological Society fear this will happen if the FCC continues to auction off its 24-GHz frequency band to wireless carriers’ 5G networks.

The problem is that forecasters must use the nearby 23.8-GHz frequency – the only frequency where they can hear the very weak, though very crucial, radio signal that water vapor emits. The noise of cellphone transmitters can easily drown them out. 

Last year, Neil Jacobs, NOAA’s acting chief, told the House Subcommittee on the Environment that, with 5G networks using the 24-GHz frequency, the accuracy of weather predictions could decrease by as much as 30 percent, setting accuracy back four decades. This means that storm paths and landfalls could be predicted incorrectly and that people may have less time to prepare for storms such as hurricanes.

In late 2019, an international conference decided that 5G technologies operating on the 24 GHz band could not emit noise more than -33 decibel watts (dWH), the unit that measures the strength of wayward signals. That’s less strict than the -42 dWH the World Meteorological Organization wanted, but stricter than the -20 dWH the FCC wanted.

Still, experts remain concerned. Studies from NASA and the NOAA have shown that noise needs to be limited to as much as -52.5 dWH to protect weather forecasting accuracy.

Floods are the most common natural disaster in the United States, causing some of the most costly property damage and the highest number of fatalities of any natural disaster. Yet only 15 percent of Americans carry flood insurance.

Why is that? We believe a lot of it has to do with misconceptions. Homeowners simply don’t understand the risk or wrongly think they’re already covered for flood under a standard home insurance policy. First Street Foundation, a non-profit alliance of researchers and scientists, released an extensive new database of homeowner risk, revealing significant gaps in current flood map designations. 15 million additional properties have been identified in areas of substantial risk and almost certain to experience some flood event.  

That’s why we dedicate so much of our time to agent and homeowner education by offering:

• A library of educational videos on all aspects of flood
• Live and recorded webinars for deep-dives into specialized topics
• Sales toolkits to help agents get these crucial conversations started with customers

Have questions about the changing flood risk your customers face? Check out our video Is Flood Risk on the Rise?