Reform of the $1.2 Trillion U.S. National Flood Insurance Program

Congress passed on June 29 a 5-year extension of the federally-run NFIP which covers 5.6 million policyholders across the country. The President is expected to sign it into law soon.

The bill contains several important modifications in the operation of the program, notably a much welcome move from subsidized rates to risk-based premiums and a desire to evaluate different alternative options to bring the capacity of the private sector more effectively. The bill requests a series of important studies to be completed in the coming months.

Over the past 5 years our team at the Wharton Risk Center has been leading a national research effort on the future of the flood insurance program, along with several other key stakeholders and partners. We look forward to playing an active role in the near future on these analyses; knowledge for action.

If you are interested in the topic you might want to read Dr. Michel-Kerjan’s work on the topic written for a non-specialist audience.

The new Reform Bill integrates several of his proposals:

  • Huffington Post Op-Ed by Erwann Michel-Kerjan: “Reform of the US National Flood Insurance Program (NFIP)(CLICK HERE)”, April 28, 2010.
  • Science magazine’s Policy Forum article: Reforming Flood Insurance (CLICK HERE).
  • On the topic of natural disaster insurance: Op-ed by Dr. Michel-Kerjan in the Washington Post: “Prepare Yourself, Disasters Will Only Get Worse (CLICK HERE)
  • Read the first study on the possible privatization of flood insurance (2012)!. CLICK HERE