Get Ready for More Hurricanes

(Bloomberg View) -- Beyond inflicting epic destruction and suffering, Hurricanes Harvey and Irma have brought the U.S. face to face with the catastrophic flood dangers posed by climate change. Fed by deeply warmed ocean waters, the storms turned violent -- as climate-change models have predicted. Higher sea levels have intensified flooding.

Yet if history is a guide, no matter how great the losses, Harvey and Irma will not dampen Americans' enthusiasm for living and working along coastlines vulnerable to hurricanes. The cycle of building, flooding, rebuilding -- and then ignoring the problem -- plays out repeatedly in every region that experiences big storms. And the costs just keep rising.

The U.S. needs to rethink the way it prepares for and responds to great storms. This will require measuring the risks better, pricing them more realistically, and getting states, local governments and property owners to bear their share.

Incentives to take responsibility for catastrophic floods have long been out of alignment: Local governments are free to set building rules with little regard for how well structures can withstand wind and water, because when hurricanes happen, the federal government largely foots the bill for cleanup and rebuilding.

There are simple ways to give local governments, developers and homeowners greater reason to care -- for instance, by imposing a state deductible on federal disaster relief, which could be reduced for states that toughen their building codes or help people to move away from vulnerable coastlines.

The National Flood Insurance Program also needs attention. Its premiums should be raised to better reflect individual properties' potential for flooding, with subsidized premiums for the most vulnerable properties phased out altogether. Such a change is long overdue. The NFIP is already $25 billion in debt, even before shouldering losses from Harvey and Irma.

The NFIP imposes a noncompete provision on private insurers that participate in the program which prevents them from offering flood coverage on their own. This should be eventually scrapped -- and federal data on flood losses and claims should be made available. Private insurers, equipped with sophisticated catastrophe models that the federal government lacks, are better able to scientifically assess the growing risk of big storms in any given area, and thus to write more realistic policies.

Congress should also consider providing low-interest loans to encourage preparedness -- to help property owners elevate structures and enable communities to buy out homeowners in high-risk areas.

Better flood maps are needed, too. Many of those that exist -- they're available for only about a third of the country -- are either out of date or have been revised, at the urging of state and local governments, to understate risks. The federal government has long been stingy about funding them.

The maps should not only be brought up to date but also be brought into wider use. Some states still don't require that home buyers be made aware of their properties' flood history and vulnerability to future storms. 

The case for these reforms was strong already. It only gets stronger with the growing risk of monster storms and the continuing movement of people and their homes to the water's edge. Congress should act now, as the cleanup from Harvey and Irma proceeds -- and before the country forgets, yet again, that hurricanes and floods ever happen.

--Editors: Mary Duenwald, Clive Crook

To contact the senior editor responsible for Bloomberg View's editorials: David Shipley at davidshipley@bloomberg.net.

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