Repetitive Losses Are Growing Outside of FEMA High Risk Maps

Analysts say the footprint for multiple flood loss properties is expanding and that properties with the most severe losses have an “outsized” influence cost.

Repetitive Losses Are Growing Outside of FEMA High Risk Maps
Photo by Wes Warren / Unsplash

A new report commissioned by the Federal Emergency Managment Agency (FEMA) says that the number of properties that have incurred a flood loss more than once is growing outside of the government’s current “high risk” maps and that properties with the biggest losses are increasingly being rebuilt without the required flood building codes.

The report, issued by Rand Corporation last week and commissioned by FEMA, says that one to four family homes are increasingly incurring multiple insured flood losses and have become a “significant driver” of claims costs for government backed flood insurance.

“The increased frequency and severity of flooding in the United States are likely to increase the number of properties that experience multiple flood losses,” the report states. “Painting a more accurate picture of properties in this category will help inform future decision making related to floodplain management, flood insurance, and mitigation efforts.”

Currently, the report states, the the flood insurance program’s claims growth is broadly stable and, while annual claim payments on multiple loss properties have been increasing since 2021 they have been trending downward over a longer period of time.

However, the report authors say there is a growing number of claims tied to “severe repetitive loss properties” (SRLPs) which are becoming larger and falling outside of FEMA’s highest risk flood maps. According to FEMA, SRLPs are 1-4 family residences that have had four or more claims of more than $5,000, or at least two claims that cumulatively exceed the building's value.

“A concerning finding is that nearly 25 percent of SRLPs have been substantially damaged more than once, meaning that the cost of repairing the damage has exceeded 50 percent of market value of the structure multiple times,” the report states.

They add that the homes with severe, repeated losses are also occurring in flood map “X” zones, FEMA’s lowest flood risk zone where government maps anticipate a less than a 1 percent annual chance of flooding.

“It is likely that many of these [structures] are in X zones where the more-stringent building [codes] do not apply.”

The report admits its findings could be overstated due to mitigation efforts by homeowners that are not reflected in current data, however the overall trend regarding multiple loss flood properties should be a priority of regulators and policymakers to examine.

“These properties have an outsized impact on NFIP resources and have made local floodplain management a challenge,” the report concludes. “It is in the collective interest to mitigate these properties when it is feasible and cost-effective to do so.”

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