Helping communities swamped by flood insurance barriers

On her second anniversary of becoming a homeowner, Hurricane Harvey hit Maya’s Scarsdale, Houston home. Like thousands of other Houstonians, she thought she was protected.

However, Maya didn’t have flood insurance. She was under the impression that flood-related damages fell under her homeowners’ insurance coverage. Thousands of other Gulf Coast residents also faced uninsured losses due to Harvey’s destruction.

Social services and disaster recovery professionals know firsthand how challenging it is to help at-risk clients get and maintain expensive flood insurance policies year after year. So, in addition to the usual “get flood insurance” messaging, we’ve outlined some additional suggestions for helping our communities become more resilient in the face of a flood event.

What You Can Do Now

Maya’s misunderstanding of flood insurance is not uncommon. Many people believe flood coverage is included in their homeowners’ or renters’ insurance policy. As trusted community messengers, social service providers can combat these misconceptions and provide Houstonians with accurate information they can trust:

• Leverage existing materials to educate the community about the complexities and intersectionalities of flood insurance. For example, flood insurance education from FEMA specifically addresses common misunderstandings about flood insurance to clear up any confusion surrounding what’s covered and what isn’t.
• Host meetings with residents and community leaders to share information about flood insurance, ask questions and listen to barriers to acquiring flood insurance. Insights from these conversations can allow service providers to develop educational materials, follow-up workshops, and outreach strategies tailored to that community’s needs. 68 percent of Harvey-damaged homes were outside the floodplain, so remember to include those seemingly low-risk households in the outreach strategy.
• Be intentional with the information you provide and the educational materials you produce. Offer your community flood insurance workshops in partnership with reputable insurance companies to inform them of their options and assist them in securing coverage that works for them.

Solving for the Future

• In partnership with community leaders, advocate for your local government to improve your area’s Community Rating System (CRS) rating through flood mitigation measures like community flood education, increased disaster response, and real estate regulation. An improved CRS rating will protect your community and make flood insurance more accessible. The CRS assigns all participating communities with a Class Rating that corresponds to a discount on flood insurance premiums–the lower your rating, the higher your discount. With a Class Rating of 5, the CRS allows the City of Houston an average discount of 25% on flood insurance.
• Support new program proposals that offset the cost of flood insurance premiums. A recent Congressional Research Service report suggested a means-tested program to increase the affordability of flood insurance. This method involves right-sizing the price of flood insurance to match the household’s income. Capping the cost of premiums for residents in a specific AMI range and targeting the deepest discounts based on community characteristics are just a few other solutions offered in this means-tested affordability framework.
• Create grant programs that make flood insurance more accessible to low- and middle-income families. Within flood zones in Texas, the median income for families with flood insurance is $82,184, while families without insurance have a median income of just $36,056. While FEMA provides grants for premiums, even discounted payments are due in one lump sum. However, low-income residents and many middle-class residents often can’t afford large upfront payments. Using philanthropic dollars to provide grants for upfront premiums is a temporary solution that program designers should use in tandem with efforts to secure more NFIP support for low and middle-income families.
• Design programs like parametric microinsurance, in partnership with insurance companies and other nonprofits, or community-based insurance, in partnership with local governments, to protect community members and build their financial resilience after disasters.
• Microinsurance policies allow low-income residents to pay lower premiums, and predefined events (like floods) trigger payouts. Households receive claims payments rapidly when the predefined event reaches a certain threshold–for example if floodwaters rise above a specific height on a flood gauge. This model saves time and increases community resilience. An insurance adjuster does not have to visit the property to assess the damage physically, and households quickly receive insurance money to get back on their feet.
• Community-based insurance is a single policy purchased by a governmental body covering a group of designated properties. Participation is voluntary, and coverage can be capped, ensuring that premiums stay low for all participants. This is a new idea. No local community-based insurance programs exist but suggested program designs offer an extra layer of protection on top of traditional, property-specific policies.

Nonprofits and social service providers have a unique opportunity to create programs or support initiatives that make flood insurance more available, especially to low-income residents. Ultimately, Maya bought flood insurance after Hurricane Harvey and now considers it one of her most prioritized expenses.

Many Houston-area families are in the same boat. As extreme weather events increase in intensity and frequency, flood insurance shouldn’t be a luxury. Major flooding happens year-round, so providing better access to this essential coverage will build stability and resiliency within our communities.

Contributors: Chris Laugelli, Melissa Langston