Flood Insurance

Mother Jones Warns Global Warming Will Boost National Flood Insurance Premiums—Misses Point


flood insurance
Credit: Webking: Dreamstime

The Climate Desk over at MJ cites a report done for the Federal Emergency Management Agency that concludes that rising sea levels and harder rains could increase the areas of the United States at risk of floods by up to 45 percent by 2100. Mj reports:

Like previous government reports, it anticipates that sea levels will rise an average of four feet by the end of the century. But this is what's new: The portion of the US at risk for flooding, including coastal regions and areas along rivers, will grow between 40 and 45 percent by the end of the century. That shift will hammer the flood insurance program. Premiums paid into the program totaled $3.2 billion in 2009, but that figure could grow to $5.4 billion by 2040 and up to $11.2 billion by the year 2100, the report found…

…for the program to stay solvent, the average price of policies would need to increase by as much as 70 percent to offset projected losses, according to the FEMA report. That means individual policyholders who now pay an average rate of $560 per year could have to pay as much as $952 per year by 2100.

In its rush to declare a crisis that only benevolent government bureaucrats can solve, MJ characteristically overlooks the fact that there should be no National Flood Insurance Program in the first place. If private insurers think it's too risky for someone to build a house on a plot of land due to the high probability of inundation, then why should taxpayers subsidize their folly?

Second, assuming that the U.S. government does not manage to stop modest economic growth for the next 90 years that would mean that today's per capita GDP of $43,000 growing at 2 percent annually would rise to $255,000 by 2100. It is not unreasonable to think that Americans who would be six times richer in 2100 might be able to afford to pay double for their flood insurance.

And thirdly, let's consider those 4-foot sea level rise projections. Indeed wise climate modelers have managed to tweak their computers into outputting just such data. And who am I to gainsay them? Nevetheless, I can't help noting that a study just last week taking glacier melting and thermal expansion into account in Nature Geoscience found that between 2006 and 2011 sea level rose by 2.4 millimeters per year. Extrapolating that increase for the next 90 years suggests an overall increase of about 212 millimeters by 2100, or just over 8 inches. Interestingly, a 2006 study in the Proceedings of the National Academy of Sciences came to much the same conclusion.