Panel 4: Flood Insurance

1. Panel 4: Flood Insurance Summary/Aggregation of Discussions

2. Question 1: How can individuals be encouraged to buy flood   insurance or lenders encouraged to require purchase of flood insurance? Consensus: Bundling flood with other perils into a single policy is a good idea, and would solve some problems in the US, such as low penetration rate in the US. Discussion/Future research? • How would it work in the US? • Does this mean that private insurers would once again be covering flood risk? • If not, how could this bundled policy be structured so the private insurers would want to take on the risk? • Would it need to be a joint policy of back by both private insurers and the government? • Maybe government as backstop to limit private insurers losses like for terrorism insurance? • More research on how other countries handle flood insurance. • Collaboration between entities that look at the issues from different perspectives can provide useful new insights.

3. Question 1: How can individuals be encouraged to buy flood   insurance or lenders encouraged to require purchase of flood insurance? Interesting idea on how to encourage individuals to buy flood insurance: • Quit stating risk in terms of 1% flood plain. • State in terms of mortgage length: • 25% chance of flood loss over a 30 year mortgage. • Business/grant opportunity: create an app for this.

4. Question 2: What are the social, political, and economic implications of charging fully risk-based rates for those in high-risk flood zones? Consensus: Generally agree that “unaffordable” rates in flood prone areas could lead to issues such as • Only the rich could afford to live on the coast. • Poor might become trapped or abandon “undesirable” flood prone areas Discussion/Future research?  • Research ways to incentivize low income people to leave “undesirable” high-risk areas • Develop support to ensure more options for correcting the current situation without extreme hardships for individuals.  • Is having only wealthy on the coast bad if only they can pay fully risk-based rates • Or would they use their political connection to receive benefits paid for by taxpayers, such as flood defenses to protect wealthy enclaves?

5. Question 3: How should you balance between investments in flood protection and relying on flood insurance? Consensus: • Yes there should be a balance, but the Dutch method of flood protection applied to whole US would be too expensive and politically difficult. Discussion/Future Research? • Investigate strategic approaches to determine best net gain for municipal and state governments in order to enhance decision-making on insurance financing, development measures, relocation projects, and taxation policies.  • Need societal discussion on whether to go on individual-based insurance or more collectivized.  • Flood protection is a combined effort between the state, local government and individual homeowners. Authorities should do more in order to increase public trust in the existing flood protection measures and new initiative • How do you get the people (legislators) from Kansas to support major coastal defense projects? • We gave you the Farm Bill, give us some money for coastal defense? • We host ports and naval installations that are good for the whole country?

6. General Question: Given what you've learned during this panel, what types of collaborative research and action might be most useful in affecting adaptive policy? • Applied sciences: more resilient materials (mold); and perhaps have it required – making it more flood resistant. • Sim City competition, without regular constraints (of physics) the youth can come up with some original ideas. This would directly affect their parents. • Collaborative research needed on alternative insurance financing models!  • How do we incentivize localities to turn over flood plain property to natural flood barriers?  Issue is loss of revenue and no incentive because cost of relief is not borne locally. • Innovative approaches to correct today’s system in the US should be devised with significant incorporation of European-style approaches.  • Intergovernmental, international collaboration important for forming adaptive policies, learning about adaptive strategies

7. General Question: 'Given what you've learned during this panel, what types of collaborative research and action might be most useful in affecting adaptive policy? • Educate people (and builders) about incentives and possible future savings as a result of preparing their property for floods. • Difficulty identified:  VA reluctant to use FEMA funds to buy out local residents in floodplain area but they would have to keep that area permanently green and that reduces the tax revenue.  • Localized insurance: paid to community for reinforcement and restructuring in order to mitigate future impacts. • Neighborhood communities to take similar actions; raising everyone up, rather than isolated areas – as those unaffected have to pay towards damaged areas regardless • Invest in storm water systems, rather than simply waste water (Norfolk as an example).