FEMA: Floods, Fine Print, and the Fiction of Climate Change

The National Flood Insurance Program (NFIP) is, I believe, off-track. We are subsidizing (socialism) flood risk using a mid-20th century insurance framework (ancient) against 21st century climate change (reality), local politics (not national), and changing hydrology. FEMA is not actively constricting or guiding development away from high risk areas, despite this being an objective of the law. The NFIP is deeply in debt.

Flood water does not care about your mortgage, zip code, income, skin color, generation, or party registration. It only cares about gravity, volume, and contours.

Image generated by ChatGPT, March 2026

The NFIP is next in my series of things that surprised me about FEMA. FEMA is the Federal Emergency Management Agency, part of the Department of Homeland Security (DHS). I quit FEMA in March and wrapped up 20 years working for the executive branch of the government. See why in my earlier post. 

Flooding

Every year, we experience flooding. It’s a global problem. In March, my place of birth, Nairobi, experienced devastating downtown floods that killed over 25 people and left many stranded. At the same time, “Police in Australia's Northern Territory warned of crocodiles "absolutely everywhere" on Sunday and said they had moved more than 1,000 people across the state into shelter after massive floods.”

I can finally say it without whispering or watching my back. It’s getting worse because of CLIMATE CHANGE! In the U.S., recall the devastating Independence Day 2025 floods in Texas that killed at least more than a hundred people, displaced thousands, and ousted one of FEMA’s revolving door of acting administrators. Or according to the Governor in December 2025: “This historic flooding resulted in, we believe, the largest dollar amount of public infrastructure damage in Washington state in more than four decades." Before the end of Winter, parts of Southern California and Nevada had triple digits weather while other parts experienced cold, snow, rain, and even floods (Hawaii). As one late night show host said, even the weather is polarized (Kimmel, 2026).

Expect more globally in the coming years because the climate is changing. Rapidly. 

What is the NFIP and flood risk

If you’ve shopped for a house (or followed the news), you’ve hopefully heard about FEMA’s flood maps and mandatory insurance. Flood insurance in the United States is primarily delivered under the National Flood Insurance Program (NFIP) that FEMA manages. It exists because decades ago, before FEMA was even conceived, private insurers fled the flood market because they could not make money. The risks were too high. Today, they are doing the same, threatening the fire insurance market in the west.

FEMA depicts flood risk on Flood Insurance Rate Maps (FIRMs). These maps dictate whether a property is in a Special Flood Hazard Area (SFHA) or not. The SFHA is informally known as the 100-year floodplain but that doesn’t mean your property will likely flood once in 100 years. Instead it claims that there is a 1% or higher chance of annual flooding. If the property is in the SFHA, insurance is mandatory for a government backed mortgage (most are) or any other federal assistance related to the property. This includes disaster assistance. The maps also affect local land use regulations.

In this post, I cover three surprises under the NFIP: the ceiling, the maps, and climate change.

Disclaimer: the views expressed in this post are solely my own, published under my first amendment rights, and do not necessarily reflect the views of the United States Government or any of its current or former federal agencies. 

Surprise 1: $250,000 Ceiling 

I pay insurance for my property because it's in an SFHA. Premiums are north of $800 per year and can rise into the thousands depending on the risk (location, building construction, mitigation, etc.) Get your specific rate here.

But a small flood can cause a lot of damage. FEMA claims that one inch can cause $25,000 in damages. It could be a lot more in reality. One inch of water in my house means that the wooden floors, drywall, baseboard, carpet, crawl space insulation all had to be replaced. Everything on the floor (bottom of furniture, cabinets, throw rugs, cushions, boxes in the garage) will either be stained or damaged. 

Under NFIP, residential building coverage is capped at $250,000 (and $100,000 for contents). 

What? My normal home insurance has much higher caps. Those are generally based on the replacement cost of items or reconstruction cost of the house. 

Well that number might have made sense in 1978 when the number was set. But not in 2026 with taxes, tariffs, labor costs, materials, and time. It’s like the sign on the highway, maximum penalty for HOV violation $386. Set in statute and could be meaningless for its size. 

So in other words, first we begrudgingly accept that private companies don’t want to insure high flood risk areas because in a capitalist society we can’t force them to insure. Then we decide to socialize the insurance risk by subsidizing it with taxpayer dollars. We make it mandatory if you are receiving federal assistance of federally backed mortgages and are in a Special Flood Hazard Area (SFHA) i.e., a mapped high-risk zone. Then we cap the payout below full recovery cost in many real-world scenarios. And on top of all of it (stay tuned for a different blog post), we do not guide development away from high risk areas. Land is valuable, people want to be near the water, so we allow them to build. And we don’t necessarily cap the number of times one can get a subsidized insurance payout or federal disaster flood assistance.

I was surprised about these ceilings.

Surprise 2: A Map is not a Just a Map, its Politics + Mapping

One would think that a flood risk analyst models the flood risk using best available science, a cartographer develops the Flood Insurance Risk Maps (FIRMs), and then they are published. Of course its not that simple. Nothing in government is. Not all areas that need maps have them. According to an October 2021 Government GAO report:

However, according to FEMA, there are an additional 1.3 million miles of rivers and streams that require flood hazard mapping—specifically, 329,000 miles with population, and about 1 million miles with possible population growth

Not only are critical areas unmapped, but many existing maps are very very old (1980s), risk is not forward-looking, and updating a map is a long, arduous, yes, political process. 

After FEMA completes the modeling, it drafts the maps and presents it to the communities for their review, comment, and appeals. What community would want its flood hazard area expanded? That has significant financial implications (mandatory insurance requirements, increased premiums, depressed property values, constrained development potential). Take a look at the before and after of the current proposed maps for Harris County (Houston) and think about being a resident, politician, or property owner. 

If the process survives appeals, FEMA issues a final letter and the communities then MUST adopt the map into their local ordinances. In three Washington Counties (King, Spokane, and Thurston), this took 5-6 years starting in 2021. And because of funding and staffing, FEMA can only tackle a few areas each year from all of the 3,000+ counties in the U.S.

I was surprised about this political process.

Surprise 3: The Silence on Climate

NFIP maps historically rely on backward-looking hydrology: the 1% annual chance flood (the so-called “100-year flood”) is derived from historical data sets. I had to think of insurance, actuaries, and risks before it made sense to me. It’s based on statistics (like risk of having a heart attack at the age of 75 for male smoker and male non-smoker) and assumes that the past is the primary predictor of the future. 

But increased precipitation intensity, atmospheric rivers, recurrent coastal surge events are not theoretical because they are caused by measurable recent changes in climate, what I can now call climate change.

 The October 2021 GAO Report stated:  

FEMA’s new flood insurance rating methodology, Risk Rating 2.0, takes into account more variables—including flood frequency and multiple flood types, such as heavy rainfall (i.e., pluvial flooding) that can overwhelm existing storm water drainage systems, and tsunami. However, FEMA has not incorporated these additional flood risk variables into FIRMs

The result is unnerving: FEMA’s maps and maps now produced by others are significantly different. Check out this analysis that NPR did on the Texas 2025 flooding showing the differences. 

Surprise 4: Floodplain Management

The NFIP is actually a 3-legged stool with insurance and mapping constituting two legs. The third, unbeknownst to me before I joined FEMA, is floodplain management. 

The stated purpose of the 1968 National Flood Insurance Act (NFIA) is “to (1) encourage State and local governments to make appropriate land use adjustments to constrict the development of land which is exposed to flood damage and minimize damage caused by flood losses, (2) guide the development of proposed future construction, where practicable, away from locations which are threatened by flood hazards.

I began to look for how this works, or actually, doesn’t work. I only found federal standards for building in the floodplain as authorized by Section 4002(b): 

(b) The purpose of this Act, therefore, is to … (3) require States or local communities, as a condition of future Federal financial assistance, to participate in the flood insurance program and to adopt adequate flood plan ordinances with effective enforcement provisions consistent with Federal standards to reduce or avoid future flood losses.

For now, suffice it to say, that FEMA establishes standards (e.g., how high to put the base floor in a flood zone, requirement for vents below the base floor to allow flood waters to flow) that communities must require and enforce. This trickle down requirement is no different from any other federal requirement: the government sets standards (fuel and energy efficiency, building codes, earthquake resistance in high seismic areas, water quality, highway safety). Both public and private entities must implement these in their products, building, or infrastructure development. The only way to make this happen for private development is through building codes and therefore through local enforceable ordinances because it is not FEMA that issues building permits. Communities do. 

But we can still build in the floodplain. I was surprised to see no real effort to comply with the other parts of the Act. There is no noticeable attempt to constrict the development in floodplains or guide development away from high risk areas. 

What I saw, and perhaps I’m missing something, is that communities can issue building permits in flood zones as long as the requirements are met. Some more advanced communities may try and zone floodplains as open space or lower density zones but these are voluntary measures, not FEMA requirements for NFIP participation. 

Why Should You Care?

As noted at the top of this post, the NFIP is out-of-date and not attempting to fulfill one of the core objectives of the law (constricting or guiding development away from high risk areas). It is also highly subsidized and unfair: if you are a taxpayer who does not live in a high flood risk area, you are subsidizing those who do. They get flooded, you pay, they get flooded again, you pay again. Rinse and repeat. 

Recent changes have attempted to move individual rates closer to actuarial-based costs (see Rate Risking 2.0). However, it is still in debt and will remain there. The NFIP needs to consider future risks and it not be a burden on the taxpayer. But only Congress, not FEMA, can change that.