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A new report by the Federal Emergency Management Agency (FEMA) may offer some assistance by providing credible scientific information that details the long-term forecast for flooding due to population growth and climate change. The benchmark report titled, “The Impact of Climate Change and Population Growth on the National Flood Insurance Program Through 2100,” was prepared over the past 5 years by AECOM using current research and science on demographics and climate in the United States. Overall, the report concludes we can expect more flooding, more damage, and increased flood insurance premiums.
The report looks at two primary surface water flooding sources, rivers and ocean coastlines, but does not address coastlines of the Great Lakes. For ocean coastal flooding, there is projected to be a considerable increase in Special Flood Hazard Areas (SFHAs) through 2100. Nationally, the increase will be about 55% (assuming a fixed shoreline) although the report states “the typical increase may range from less than 50% along the Pacific Coast to over 100% for portions of the Gulf of Mexico and the Atlantic coasts.”
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For riverine areas, the national projection is about 45%, but it is expected to vary considerably by region. For example, depths and areas of SFHAs in the Great Lakes region and Northwest “may increase by over 100%,” while “smaller relative increases of about 20 to 40% may be typical of areas of the central and Gulf regions.”
The report examines these projections relative to both climate change and population growth, stating “Within typical developed areas of primary interest for the National Flood Insurance Program (NFIP), approximately 30% of these increases in flood discharge, SFHA, and base floodplain depth may be attributed to normal population growth, while approximately 70% of the changes may be attributed to the influence of climate change.”
However, it is also important to note that different geographic areas flood for different reasons. For example, unlike in ocean coastal areas where the amount of rain has less influence on storm impact than such things as storm surge, river flooding is directly related to the frequency and intensity of storms. Moreover, the relationship between population growth and the level of development in an area is another factor because it is generally recognized that increased development contributes to flooding via large impervious areas and poor stormwater management practices that increase runoff.
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So what does this mean for flood insurance? If your facility is in a floodplain, you are likely already aware that the cost of flood insurance is going up, but so, too, are the number of properties that will need flood insurance. According to the Report, the number of properties that are insured under the NFIP is now approximately 5.6 million, but by 2100 that number could rise to 11.2 million. Since the NFIP is currently overhauling its entire program to become solvent and eventually eliminate subsidized premiums, this rise in numbers will be paired with an increase in premium payments as well. Based on premiums paid into the NFIP in 2009 that totaled $3.2 billion, the report states totals could reach between $4.2 and $5.4 billion by 2040 and as much as $6.4 to $11.2 billion by 2100. On an annual basis, the increase is estimated to be approximately 1% per year.
The report goes on to state, “… the average premium per policy will increase between 5% and 25% through year 2040 and 10% and 70% through the year 2100. In other words, if the current average premium for all policyholders is approximately $560 per year, then the average premium (in today’s dollars) is estimated to increase to approximately $588 to $700 through the year 2040 and $616 to $952 through the year 2100.”