The White House’s 2018 budget proposal requires a $190 million cut in funding for updating U.S. maps of flood-prone area. In place of the maps, the proposed budget wishes to “explore various other effective and fair methods of funding flood mapping efforts.”
Budget plan may possibly have an effect on flood insurance
Policyholders as well as the federal government have shared the mapping costs for the past 15 years, as outlined by a Federal Emergency Management (FEMA) spokesperson, and the Consumer Federation of America issued an announcement saying that the proposed cuts would lead to higher insurance rates.
The $190 million loss would eventually cost homeowners in one of two ways, depending on how FEMA handles the challenge moving forward.
“The maps are a critical aspect of the flood insurance program – the basis for both actuarial rates for each structure in a flood plain and for the implementation of land use policies to assure that unwise construction does not occur in high-risk flood plains,” says J. Robert Hunter, CFA’s Director of Insurance and former Administrator of the NFIP.
Possible outcomes to a federal budget cut for flood mapping
The maps aren’t updated: As maps age, they become more inaccurate, in part because new construction changes the movement of rising water. Shortly after Hurricane Katrina, for example, FEMA issued 76 new maps in Jackson County, Mississippi, where the eye of the Hurricane came ashore, the Federation says. The average map replaced was 20 years old and 10 feet too low, which led individuals to build homes they thought were safe but were not. Additionally, it led some people who thought they lived beyond the high-risk area to think they were safe and never purchase flood insurance.
Mapping continues but consumers pay: If mapping continues without federal funding, flood insurance policy holders will likely be forced to pay the additional cost, the Consumer Federation says, that can “exacerbate the unaffordability problem that resulted in the pullback of several of the Biggert-Waters Act prices. Rates are also already surcharged to try to decrease or hold off more deficits – already an astonishing $24.6 billion.”
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