State of the Facts
Floods are the most common and costly natural disaster in the US. They are responsible for devastating coastal communities and inland areas alike. The Federal Emergency Management Agency (FEMA) estimates that at least 10% of the nation’s land area is currently at risk for flooding, directly impacting about 13 million Americans. While flooding can occur anywhere in the US, Gulf Coast states get hit the most often and the hardest compared to others.
The 10 most costly floods in the history of the National Flood Insurance Program (NFIP) occurred within the last 20 years, totaling more than $50 billion in paid claims.
FEMA defines a flood as the “partial or complete inundation of two or more acres of normally dry land” involving “two or more properties.” Flooding can result from many potential sources, including flash floods, tropical storms, hurricanes, spring thaws, heavy rains, or the erosion of levees and dams.
But because floods can stretch over large areas and can occur over days and weeks, counting the number of flooding events in the US can be challenging.
One way to count floods is by looking at the number of flood insurance claims made to the NFIP.
Established in 1968, the NFIP is a program overseeing floodplain management at the federal level. It also manages a flood insurance program for people and businesses located in one of about 23,000 NFIP communities. Homes and businesses in high-risk areas within these communities are required by law to have flood insurance. These high-risk areas are categorized by FEMA as any place with a 1% or higher chance of experiencing a flood each year.
Most flooding occurs between early April through September, coinciding with hurricane and tropical storm season. The official Atlantic Ocean hurricane season occurs between June 1 and November 30. Hurricanes historically account for the costliest floods, including nine out of the 10 most significant flooding events during the history of the NFIP.
NFIP claims rose in recent years. From 2010 to 2019, about 71,000 NFIP claims were filed in an average year. That rate is almost double the annual rate of claims filed in the 1980s. A 2016 Congressional Budget Office (CBO) report on NFIP claims predicted that flooding damage from hurricanes is expected to increase significantly in the coming decades due to the effects of climate change and coastal development.
The three biggest flooding events since 2000 in terms of NFIP claims were Hurricane Katrina in 2005, Superstorm Sandy in 2012, and Hurricane Harvey in 2017.
Flooding occurs in every US state and territory, with 99% of US counties experiencing at least one flood between 1996 to 2019. Seventy percent of flood claims are filed from densely populated urban areas located in high-risk floodplain zones.
Over 95% of flood insurance policies are purchased through the NFIP. Currently, just over five million Americans have a flood insurance policy through the program. More than two million policies are in the Gulf states of Alabama, Florida, Louisiana, Mississippi, and Texas.
FEMA administers the program and determines the risk-level assessments of flood plains and the costs associated with flood insurance premiums. Since 1978, the NFIP has paid out more than $75.4 billion, or $101.9 billion after adjusting for inflation, through the program across more than 2.5 million flood insurance claims for private property owners.
More than 75% of flood insurance payouts distributed by the NFIP have gone to five states: Texas, New York, New Jersey, Louisiana, and Florida. These five states are responsible for 67% of total flood insurance claims. Adjusted for inflation, the highest-ranking state is Louisiana with $28.9 billion dollars in payouts, just over a fourth of the total payouts made to all NFIP policyholders since 1978. Approximately $22.1 billion in payouts to Louisiana stem from Hurricane Katrina claims. 
These same five states are also responsible for more than 60% of all NFIP claims. The highest-ranking state in this category is also Louisiana, at 478,779 claims.
The county with the most claims is Harris County, Texas in Houston, with approximately 171,324 total claims, about 44% of the total claims for the state.
Congress must periodically reauthorize the NFIP’s statutory authority for the agency to continue distributing payouts. The current renewal deadline is set for September 30, 2022.
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The NFIP offers three types of coverage for homeowners: building property coverage up to $250,000, contents coverage up to $100,000, and increased cost of compliance (ICC) coverage up to $30,000.
Here, payout refers to the total amount paid back to policyholders who filed a claim to the NFIP.
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