Two of the worst U.S. floods in 2022 ravaged homes, destroyed businesses and forced residents to evacuate for weeks.
But homeowners in Florida and Kentucky are getting wildly different payments from a federal flood insurance program crucial to rebuilding and recovery.
Florida residents whose homes were flooded by Hurricane Ian in September have received far more money on average from the National Flood Insurance Program than eastern Kentucky residents hit by a historic deluge in July, an E&E News analysis shows.
The average NFIP payment to Florida households is $91,000.
In Kentucky, it’s $49,000.
The disparity is due largely to factors other than the severity of the two storms or the amount of flood damage, E&E News found. Rather, it’s caused by factors including highly inaccurate government flood maps in Kentucky, the small number of Kentucky households that have NFIP insurance and the limited amount of coverage they bought.
Experts said E&E News’ analysis points to longstanding problems with flood insurance in the United States and with the NFIP.
Many inland residents like those in Kentucky face increasing flood risks in part from climate change but have no coverage or have coverage that is inadequate for rebuilding because they don’t understand their risk or can’t afford flood insurance.
“If you don’t have flood insurance, it’s hard to recover,” said Craig Fugate, who ran the Federal Emergency Management Agency during the Obama administration. FEMA runs the NFIP, which insures 4.7 million properties and sells 90 percent of flood insurance policies in the U.S. Standard home insurance policies rarely cover flood damage.
The dearth of flood insurance in the flooded Kentucky areas combined with the extremely low income levels have left many Kentucky residents struggling to rebuild and unable to return to their neighborhoods nearly a year after the disaster, said Eric Dixon, a senior researcher at the Ohio River Valley Institute who wrote a report on the financial difficulties.
Many flood survivors now have no way to pay for cleanup and rebuilding, Dixon said. Other forms of state or federal assistance such as grants from FEMA or the Department of Housing and Urban Development are smaller and slower to arrive than payments from flood insurance, Dixon added.
“My big worry is that we’re not going to rebuild fast enough,” said Dixon, a former resident of Knott County, Ky., which was declared a disaster area last July. “And even more people are going to have to move away or never come back. We’re going to lose so much of what made that place special.”
FEMA did not dispute E&E News’ analysis and said it wants to make NFIP policies affordable, which potentially involves subsidizing premiums for lower-income households.
“FEMA recognizes and shares concerns about flood insurance affordability for those who need it. Making flood insurance more affordable is a top priority for the agency,” David Maurstad, a FEMA assistant administrator and senior executive of the NFIP, said in a statement. “We will continue to work with Congress to examine all affordability options.”
Rebuilding in Kentucky was so slow that in April FEMA offered flood survivors in six Kentucky counties an option to buy the agency’s mobile homes that are intended for temporary use for their long-term housing. FEMA’s Direct Temporary Housing Assistance program typically lets people occupy the homes for up to 18 months.
“FEMA is not really authorized to provide permanent, long-term housing,” Fugate said, adding that the 18-month limit can be waived in extreme circumstances. “But people didn’t have insurance. They can’t rebuild. And there will be no other housing option in the immediate future if those manufactured housing units are pulled out of there.”
This gap in flood coverage is likely to get worse. Kentucky households in the flooded counties are projected to see their insurance premiums triple on average under FEMA’s controversial restructuring of rates, called Risk Rating 2.0. The agency is revising its insurance rates after having calculated flood risk more accurately by using better flood modeling.
To highlight the NFIP problems, E&E News compared payments in the 25 Florida counties that were declared a disaster area after Hurricane Ian and the 13 eastern Kentucky counties that were declared a disaster area after the flood in July. E&E News used claims data for single-unit residences that were damaged during the official incident periods set by FEMA for the two disasters.
The comparison shows that:
- Florida households in the disaster counties were far more likely to have NFIP coverage than Kentucky households in the disaster counties. In Florida, roughly 20 percent of the households have NFIP insurance compared to only 3 percent in Kentucky.
- Florida households with NFIP coverage had much higher policy limits. In Florida, the average residential coverage limit was $265,000 for those who filed claims after the disaster. In Kentucky, it was $102,000. The disparity likely results from much higher income levels and property values in Florida.
- FEMA flood maps in Kentucky are much more inaccurate than those in Florida and lead tens of thousands of households to underestimate their flood risk. In the Kentucky counties, 28 percent of properties are shown incorrectly on FEMA maps to be outside a flood zone, according to an E&E News analysis of data from the First Street Foundation climate research group. In the Florida counties, 2 percent of properties are shown incorrectly.
- Only 47 percent of homeowners in the Kentucky counties have a mortgage compared to 56 percent of homeowners in the Florida counties and 61 percent of homeowners nationally, according to an E&E News analysis of Census Bureau data. Federal law requires people to buy flood insurance if they have a federally backed mortgage on a property in a FEMA flood zone.
Florida has one of the highest flood-insurance coverage rates in the U.S., but Fugate, the former FEMA administrator, said even battle-scarred Floridians familiar with hurricanes underestimate their flood risk.
“When people ask, ‘Do I need to be concerned about flooding?’ I tell them, ‘Well, look at your driver’s license’,” said Fugate, who ran the Florida Division of Emergency Management before becoming FEMA administrator in 2009. “If it says Florida, then the answer is yes.”
Many residents in both states still live in temporary housing that FEMA provides to those who did not have adequate flood insurance but saw their homes destroyed.
Terry Thies, a longtime Perry County, Ky., resident, lost her family’s generational home in July after 28 inches of water rushed into her bedroom. Thies did not have flood insurance, and all that FEMA could offer the 70-year-old was rental assistance — $550 for a deposit and $500 for the first month’s rent, Thies said.
Thies had to dig into her retirement savings and get a loan to rebuild in a different location.
“My neighborhood is gone,” Thies said, referring to her former residence in Bulan, Ky. “There are still houses, but nobody lives there anymore. In my little area, there’s nobody.”
The level of flood insurance coverage in eastern Kentucky is likely to drop further because most households can’t afford the new rates, officials said.
Under FEMA’s new risk assessment model, households in the 13 flooded Kentucky counties will see their yearly premiums nearly triple on average, to $3,500 from roughly $1,200, an E&E News analysis of FEMA records found. That increase is much higher than the average rate hike that FEMA projects nationally, which will see premiums double to $1,808 from $888.
“Thirty-five hundred dollars. That’s two month’s income for a lot of our households,” said Scott McReynolds, a longtime eastern Kentucky resident and executive director of local housing nonprofit Housing Development Alliance. “If flood insurance is $3,500, they are never going to be able to afford it.”
Sixty percent of the Kentucky households damaged by the July flood had an annual income of $30,000 or less, according to the Ohio River Valley Institute report.
“It’s the cost more than anything,” said Danny Moses, emergency management director of Whitley County, one of the hardest-hit areas in Kentucky. “Everyone I’ve talked to said they can’t afford it.”
At current premium levels, even those who can afford flood insurance sometimes opt out, McReynolds said. He also noted that flooding often occurs outside of areas that FEMA designates as flood zones where flood insurance can be mandated.
Nearly 80 percent of homes inundated in Kentucky were outside of high-risk areas designated by FEMA, according to the nonprofit Foundation for Appalachian Kentucky.
FEMA flood maps are especially inaccurate in inland regions such as eastern Kentucky where a topography of steep valleys and hills makes flood prediction more difficult.
“The FEMA maps are not good at predicting flash flooding,” McReynolds said. “And when you layer on climate change and changing weather patterns, you get these really inadequate maps.”
The most vulnerable households without flood insurance are now facing increasing flood risks as the planet warms, climate scientists said.
“What used to be the 100-year flood may now be the 75-year flood or 50-year flood,” said Kentucky State Geologist Bill Haneberg, who studies the effects of climate change on disasters. “The frequency is going to compress itself.”
More inland residents will have more intense and frequent rainfalls that could inundate steep valleys and rural villages in a day or less, said Jonathan Gourley, a NOAA meteorologist who models the impact of climate change on flooding events.
These areas are going to be “more difficult to live in,” Haneberg said. “It’s going to become a much more hazardous area in a region that is economically stressed.”
