Insurance Industry Reacting as Flooding Moves From Risk to Certainty

Brooke Jarvis writes an in-depth feature article that examines the changing flood insurance industry. The central trope of the article—that flooding risk has already become flooding certainty in some parts of the country—is exemplified by the Hampton Roads Area of Virginia, where the sea level is rising as the land sinks, raising relative sea levels faster than anywhere else on the Atlantic Coast. Jarvis explains of the planning relevance of this story in the city of Norfolk:

The operative measurement for rising waters in Norfolk is not inches but feet — as many as six of them by the end of the century, according to the Army Corps of Engineers, though estimates vary. City planners are forthright that they’re preparing for a future in which parts of the city do not survive.

The extreme risks facing coastal communities are visible in the insurance industry, which is changing quickly in response to the more frequent floods brought about by rising sea levels and more extreme weather events, but also federal legislation known as. Biggert-Waters and Grimm-Waters, passed in 2012 and 2014, respectively. "The first law cut subsidies and phased out grandfathered rates so that premiums would start to reflect the true risk that properties…face — reaching what the N.F.I.P. calls 'actuarial soundness.' The second tried to slow the rate of those increases when it became clear how hard they would hit property owners," writes Jarvis.

The long-read article is the second in a series from the New York Times Magazine's climate issue. The article includes a lot more detail about the insurance industry, the land use implications of sea level rise, and the effect of federal legislation on how homeowners are addressing the challenges of climate change. Consider this article mandatory reading for planners, homeowners, and residents living in coastal areas. 

For more coverage of insurance in a world of certain flooding, see a feature article about a Urban Land Institute report from 2013 and an article by ARUP from March 2017.