Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

Vermont Is the Soggy Edge of America’s Flood Insurance Crisis

More and more Americans are going to need flood insurance — yet the market is contracting.

Montpelier, Vermont.
Heatmap Illustration/Getty Images

Torrential rain drowned parts of New York State and Vermont this week, bringing “historic and catastrophic” flooding, in the words of Vermont governor Phil Scott. Now, as the immediate horror of the event recedes and evacuees journey home, many are sure to face another disaster: unrecoverable property loss and damage.

Despite the region experiencing several destructive storms in recent memory, including Hurricanes Irene in 2011, Sandy in 2012, and Ida in 2021, very few residents in the Northeast have flood insurance policies. According to the Federal Emergency Management Agency, only about 1% of properties in Vermont and 2% in New York State had policies in 2021 through the National Flood Insurance Program, or NFIP, which administers most flood insurance policies in the United States.

The Northeast is not unique in this regard. The U.S. flood insurance market has been contracting since 2009, even as climate change has brought more damaging floods and storms to many parts of the country over the same time period. Even in Florida, which has the most policies in effect of any state, uninsured losses are racking up. About 13% of homes were insured for flooding during Hurricane Ian last year, and the state still incurred an estimated $10 to $17 billion in uninsured damages.

The pattern threatens to blight communities and increase economic disparities as the effects of climate change intensify. “Without a national plan to make flood insurance affordable and accessible, many more will continue to struggle after these storms,” wrote Carolyn Kousky, an expert on flood insurance at the Environmental Defense Fund, in an op-ed in The Hill after Hurricane Ian.

Flooding is already the most common and costly natural disaster in the United States, and it’s expected to get worse. Climate change will raise sea levels, putting coastal communities at risk of more dangerous storm surges. A warmer atmosphere also sucks up more water from the land, only to dump it back down later. The Fourth National Climate Assessment found that heavy precipitation events could increase in the U.S. by at least 50% of the historical average by the end of the century. Much of this rain will occur in areas all over the country that didn't previously see flooding. Rainfall intensity in the Northeast has already increased at a faster rate than anywhere else in the U.S.

Still, it’s no big mystery why so few people purchase flood insurance, even in hurricane-ravaged places like Florida. It’s expensive, confusing, and many people are either ignorant of their flood risk, unaware their regular homeowners insurance doesn’t cover floods, or willing to roll the dice.

There are few options on the private market, and they tend to cost more than policies through the NFIP. But the national program’s policies can still cost upwards of $1,000 per year. The only people required to have a flood policy are those with a federally-backed mortgage who buy property within a “special flood hazard area” — an area deemed to have a 1% risk of flooding in any given year. But the maps designating those areas are out of date in much of the country. Flood risk is not static, as urban development continuously drives changes in hydrology. Some experts say that even when the maps are updated, they don’t adequately reflect flood risk — by, for example, not taking climate change into account.

Janet Thigpen, a flood mitigation specialist in upstate New York, told me that when she talks to residents about flood insurance, most of the time it’s because they are asking her how to get out of buying it. “It's a cost, it’s not cheap, and they don't feel there's value,” she said. “They either say, I've lived here for however long and it has never flooded and it's never gonna flood, or, it flooded but that was a record-breaking flood and it's not going to happen again.” She added that many seem to think that if their homes do flood, insurance won’t actually cover a lot of the damages.

But when a storm comes through, insurance can mean the difference between putting your life back together and being forced to abandon it. Although President Biden approved an emergency declaration for Vermont on Tuesday, which will give residents access to disaster relief and emergency assistance, those grants are typically only a few hundred dollars and are capped at $5,000. National flood insurance policies, on the other hand, pay out up to $250,000.

It’s too early to tally up the full economic toll of this week’s floods, but Vermont Governor Scott said Tuesday that thousands of people lost homes and businesses. Studies have found that there’s often an uptick in flood insurance contracts after a disaster like this, but many let their policies lapse in the proceeding years as memory of the event fades.

There’s much debate and disagreement about how to improve the national picture for flood insurance, John Zinda, an environmental sociologist at Cornell told me. On one hand, insurance puts a price on living in a risky place, and from that perspective, the cost of flood insurance should be high in the riskiest places. FEMA recently introduced a new insurance pricing system called Risk Rating 2.0 that attempts to better capture that risk. It has led to major increases in premiums for homes built in floodplains. (A number of states and municipalities are suing FEMA over the changes.)

On the other hand, said Zinda, that way of thinking assumes that people living in floodplains have willingly taken on that risk. The reality is more complicated given that floods are increasing due to climate change. Urban development and the expansion of impermeable surfaces, like concrete, also severely exacerbates flooding hazards. “There are all sorts of things that happen over time such that somebody who got their house 20 years ago wasn't really making that choice, and now they're stuck there,” he said.

Some experts and policymakers want to improve FEMA’s buyout program for that reason. Many, including Kousky of the Environmental Defense Fund, and FEMA itself, have also put forward proposals for making flood insurance more accessible by providing targeted subsidies to those least able to afford it.

“Another way of thinking about the National Flood Insurance Program,” Zinda told me, “is that it technically works like insurance, but it’s actually part of our social safety net.”

Blue

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Economy

AM Briefing: Liberation Day

On trade turbulence, special election results, and HHS cuts

Trump’s ‘Liberation Day’ Tariffs Loom
Heatmap Illustration/Getty Images

Current conditions: A rare wildfire alert has been issued for London this week due to strong winds and unseasonably high temperatures • Schools are closed on the Greek islands of Mykonos and Paros after a storm caused intense flooding • Nearly 50 million people in the central U.S. are at risk of tornadoes, hail, and historic levels of rain today as a severe weather system barrels across the country.

THE TOP FIVE

1. Trump to roll out broad new tariffs

President Trump today will outline sweeping new tariffs on foreign imports during a “Liberation Day” speech in the White House Rose Garden scheduled for 4 p.m. EST. Details on the levies remain scarce. Trump has floated the idea that they will be “reciprocal” against countries that impose fees on U.S. goods, though the predominant rumor is that he could impose an across-the-board 20% tariff. The tariffs will be in addition to those already announced on Chinese goods, steel and aluminum, energy imports from Canada, and a 25% fee on imported vehicles, the latter of which comes into effect Thursday. “The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines,” explained Josh Gabbatiss at Carbon Brief. “And as clean technology becomes more expensive to manufacture in the U.S., other nations – particularly China – are likely to step up to fill in any gaps.” The trade turbulence will also disrupt the U.S. natural gas market, with domestic supply expected to tighten, and utility prices to rise. This could “accelerate the uptake of coal instead of gas, and result in a swell in U.S. power emissions that could accelerate climate change,” Reutersreported.

Keep reading...Show less
Yellow
Podcast

The Least-Noticed Climate Scandal of the Trump Administration

Rob and Jesse catch up on the Greenhouse Gas Reduction Fund with former White House official Kristina Costa.

Lee Zeldin.
Heatmap Illustration/Getty Images

The Inflation Reduction Act dedicated $27 billion to build a new kind of climate institution in America — a network of national green banks that could lend money to companies, states, schools, churches, and housing developers to build more clean energy and deploy more next-generation energy technology around the country.

It was an innovative and untested program. And the Trump administration is desperately trying to block it. Since February, Trump’s criminal justice appointees — led by Ed Martin, the interim U.S. attorney for the District of Columbia — have tried to use criminal law to undo the program. After failing to get the FBI and Justice Department to block the flow of funds, Trump officials have successfully gotten the program’s bank partner to freeze relevant money. The new green banks have sued to gain access to the money.

Keep reading...Show less
Adaptation

Funding Cuts Are Killing Small Farmers’ Trust in Climate Policy

That trust was hard won — and it won’t be easily regained.

A barn.
Heatmap Illustration/Getty Images

Spring — as even children know — is the season for planting. But across the country, tens of thousands of farmers who bought seeds with the help of Department of Agriculture grants are hesitating over whether or not to put them in the ground. Their contractually owed payments, processed through programs created under the Biden administration, have been put on pause by the Trump administration, leaving the farmers anxious about how to proceed.

Also anxious are staff at the sustainability and conservation-focused nonprofits that provided technical support and enrollment assistance for these grants, many of whom worry that the USDA grant pause could undermine the trust they’ve carefully built with farmers over years of outreach. Though enrollment in the programs was voluntary, the grants were formulated to serve the Biden administration’s Justice40 priority of investing in underserved and minority communities. Those same communities tend to be wary of collaborating with the USDA due to its history of overlooking small and family farms, which make up 90% of the farms in the U.S. and are more likely to be women- or minority-owned, in favor of large operations, as well as its pattern of disproportionately denying loans to Black farmers. The Biden administration had counted on nonprofits to leverage their relationships with farmers in order to bring them onto the projects.

Keep reading...Show less
Green