But the NFIP is set to expire at the end of September, unless Congress votes to reauthorize it. Here, three Johns Hopkins experts provide research-backed insights on reforming the NFIP, as well as developing a more holistic approach to flood mitigation.<\/p>\n
NFIP limitations<\/h4>\n
The\u00a0<\/span>NFIP was founded<\/a>\u00a0<\/span>in 1968 to fill the gap left by private insurers uninterested in entering the flood market because the risk is too high and too concentrated.\u00a0<\/span>Recent estimates<\/a>\u00a0<\/span>say over 95% of residential flood policies are bought through the NFIP, though that percentage could shrink as the private market grows.<\/p>\n Because of how expensive floods are to respond to, flood insurance is \u201cincreasingly unattractive\u201d for private insurers to offer, explained\u00a0<\/span>Seydina Fall<\/a>, a professor at the Johns Hopkins Carey Business School whose work explores how infrastructure projects can help communities be more resilient to climate-related challenges. It\u2019s not just water damage that drives the price up, but the scale of the destruction, too.<\/p>\n Flooding, like wildfires, affects many homes at the same time, causing \u201ccatastrophic losses\u201d for insurers. That makes it hard for them to manage risk across a portfolio because the risk hits all at once. For example, in 2011,\u00a0<\/span>Tropical Storm Irene<\/a>\u00a0<\/span>led to $63 million in insurance claims, $153 million in state and local costs, and a staggering $603 million in federal outlays in Vermont, largely due to flood damage.<\/p>\n Source: FEMA Historical NFIP Claims Information and Trends<\/p><\/div>\n While the NFIP has historically been the primary provider of flood insurance to the public, it now faces serious challenges, as home values have increased and flooding has become more common.<\/p>\n \u201cThe NFIP is overwhelmed in terms of demand,\u201d Fall said. \u201cThere\u2019s a market failure.\u201d<\/p>\n Hopkins experts pointed to a variety of updates to existing policies, as well as preventative measures to mitigate flood damage.<\/p>\n 1. NFIP reforms<\/strong><\/p>\n Fall offered two potential policy reforms for the NFIP:<\/p>\n \u201cThere are some legal complications and moral hazard-type issues in canceling the debt,\u201d Fall said. \u201cBuying it back would clear some of those hurdles as long as the price for the buyback is seen as being competitive in an \u2018arm\u2019s-length\u2019 transaction.\u201d<\/p>\n Moral hazard, or engaging in riskier behavior because there\u2019s guaranteed insurance coverage, is a behavior\u00a0<\/span>Gonzalo Pita<\/a>, an associate research scientist at the Johns Hopkins Whiting School of Engineering who models natural disaster risk, also flagged. The federal government, he said, should monitor and reduce the risk of moral hazard as well as adverse selection, or the tendency for people with high risk to buy insurance and those with low risk to skip it.<\/p>\n Both skew insurance risk pools towards homeowners likely to need a payout, causing the NFIP to pay inflated claims and become unsustainable. Minimizing these two behaviors would help the program manage the debt better, Pita said.<\/p>\n At the same time, he added, continuing to analyze and optimize risk layering strategies, an approach that brings together multiple risk management tools, can help prevent the government from bearing the full load of flood damage costs as the insurer of last resort, which increases the public debt.<\/p>\n 2. Reassess FEMA flood maps<\/strong><\/p>\n The FEMA\u2019s Flood Insurance Rate Maps do more than their name implies. In addition to setting the cost of federal flood insurance, the maps also determine which properties require insurance and help potential homeowners determine the risk of floods in a given area.<\/p>\n But according to\u00a0<\/span>Natalie Exum<\/a>, environmental health scientist at the Johns Hopkins Bloomberg School of Public Health, the flood maps are out of date and no longer accurately reflect risks.<\/p>\n \u201cWhen we say the 1-in-100-year storm or the 1-in-1,000-year storm, it\u2019s based on very old projections of rainfall,\u201d she explained. \u201cThere\u2019s a lot of spatial technology now that could improve those estimates.\u201d<\/p>\n 3. Proactive risk mitigation<\/strong><\/p>\n Beyond those reforms, Fall said it\u2019s time to think about flood insurance differently to keep the NFIP solvent.<\/p>\n \u201cWhat we really need to focus on is to try to find innovative ways to be able to manage and mitigate those risks,\u201d he said.<\/p>\n Addressing upstream risks could prevent flood damage in the long run. In fact, an analysis from the\u00a0<\/span>Congressional Budget Office<\/a>\u00a0<\/span>found that every $1 spent on flood protection projects prevents $2-3 in damage.<\/p>\n Possible interventions, Fall said, include implementing nature-based solutions, such as wetland restoration, and using more flood-resistant materials, such as concrete and brick, when building new facilities.<\/p>\n Number of FEMA-funded flood infrastructure projects, by type, between 2003 and 2018. Source: The Local Economic Impact of Flood-Resilient Infrastructure Projects by Matthew E. Kahn, Mac McComas, and Vrshank Ravi Johns (Johns Hopkins University\u2019s 21st Century Cities Initiative)<\/p><\/div>\n Pita echoed some of Fall\u2019s points, and recommended more investment in certain infrastructure projects that can save money in the long run, such as dams and levees.<\/p>\n \u201cIt\u2019s not just one silver bullet; it\u2019s a menu of interventions,\u201d he explained.<\/p>\n 4. Local policy levers<\/strong><\/p>\n One critical aspect of that menu is zoning laws, which communities can use to restrict building to certain regions. One\u00a0<\/span>2019 assessment<\/a>\u00a0<\/span>found that zoning policies could generate between $1.03 and $2.20 of benefits per dollar of costs generated if areas with a flooding probability of up to 1% are zoned.<\/p>\n Cities such as\u00a0<\/span>Norfolk, Virginia; Charleston, South Carolina; and Stonington, Connecticut<\/a>\u00a0<\/span>have all used their zoning codes to direct development away from flood-prone areas and incentivize more density outside of areas likely to flood.<\/p>\n For communities considering zoning reform, Pita developed a method through which they can build a\u00a0<\/span>custom model<\/a>\u00a0<\/span>that estimates expected damage caused by rivers overflowing their banks. This can help address outdated and inaccurate flood maps that make it difficult for communities to prevent building in flood plains. Better risk modeling efforts also help manage potential liabilities, which helps the government design a better disaster risk financial strategy, Pita said.<\/p>\n His method not only provides users with step-by-step instructions but also measures and assigns numerical values to the level of uncertainty in individual flood damage forecasts, giving governments a clearer picture of how reliable their predictions are. The approach is both more accurate and more affordable than other options, and could be used by city planners, risk modelers, insurance regulators, and FEMA mapmakers.<\/p>\n \u201cThese types of insights could inform policy directly and indirectly, from enabling smarter zoning laws and budgeting for asset maintenance to designing disaster insurance programs,\u201d Pita\u00a0<\/span>said in a 2023 interview<\/a>. \u201cAll of this is to say that better flood damage data and predictions have the potential to have far-reaching benefits.\u201d<\/p>\n Experts emphasized the need for proactive solutions as\u00a0<\/span>climate change contributes to more frequent and severe storms<\/a>\u00a0<\/span>and floods become more common and more costly. The consequences extend beyond physical damage, straining local economies, federal resources, and community health.<\/p>\n Floods cost the nation between $179.8 and $496 billion each year\u2014the equivalent of 1-2% of U.S. GDP in 2023\u2014according to a\u00a0<\/span>2024 assessment<\/a>\u00a0<\/span>from the Democratic staff on the Joint Economic Committee. More than half of the economic cost comes from the commercial impacts of flooding, whether from direct lost output or indirect loss from downtime days.<\/p>\n Graphic source: Mac McComas, Johns Hopkins University\u2019s 21st Century Cities Initiative Data source: NOAA National Centers for Environmental Information<\/p><\/div>\n The cost of natural disasters each year often exceeds the Federal Emergency Management Agency\u2019s resources. A\u00a0<\/span>Congressional Research Services report<\/a>\u00a0<\/span>found that FEMA\u2019s Domestic Relief Fund, the primary source of funding for the federal government\u2019s domestic general disaster relief programs, did not have enough money to cover its obligations four out of five fiscal years between 2020 and 2025.<\/p>\n Congress typically allocates additional funds for the agency as needed, but the persistent shortfalls highlight the additional strain that extreme weather events put on disaster relief funds.<\/p>\n The impacts of floods extend beyond infrastructure damage; contamination from flood water can harm Americans\u2019 health. When heavy rainfall overwhelms sewers and drainage systems, human and animal waste can flow into drinking water, making people sick after they consume it.<\/p>\n![\"\"](\"https:\/\/engineering.jhu.edu\/case\/wp-content\/uploads\/2025\/09\/Screenshot-2025-08-28-at-3.52.13-PM.png\")
4 solutions for addressing the rise of flood risk in the U.S.<\/h4>\n
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![\"\"](\"https:\/\/engineering.jhu.edu\/case\/wp-content\/uploads\/2025\/09\/Screenshot-2025-08-28-at-1.24.16-PM.png\")
Why mitigating flood damage is increasingly important<\/h4>\n
Damage to local infrastructure and economies<\/h5>\n
![\"\"](\"https:\/\/engineering.jhu.edu\/case\/wp-content\/uploads\/2025\/09\/billion-dollar-floods-768x478-1.png\")
Strain on federal relief resources<\/h5>\n
Risks to community health<\/h5>\n