U.S. House Financial Services Committee subcommittee holds hearing on flood mitigation and National Flood Insurance Program fiscal risks

The U.S. House Financial Services Committee’s Subcommittee on Housing and Insurance held a hearing on how targeted flood mitigation investments could reduce losses, improve community preparedness, and lower long-term taxpayer costs, with a focus on the National Flood Insurance Program (NFIP). Members and witnesses highlighted that flood risk is generally not covered by standard homeowners insurance and that the NFIP remains the primary source of residential flood coverage. Evidence from the U.S. Government Accountability Office and the Congressional Research Service pointed to longstanding structural pressures, including the NFIP’s competing goals of affordability and fiscal solvency, insufficient premium revenue to cover claims after major flood events, and the role of a small subset of repetitive loss properties in driving costs. The hearing also explored mitigation approaches to reduce taxpayer exposure, including limiting coverage for severe repetitive loss properties, expanding buyouts (including whole-neighborhood buyouts), and better aligning mitigation with risk transfer and public-private collaboration; witnesses noted that fewer than one in four of the highest-risk properties have been mitigated and that Congress has authorized FEMA to borrow up to USD 30.425 billion from the Treasury to operate the NFIP.