Millions of Homeowners Who Need Flood Insurance Don’t Know It—Thanks to FEMA

When Michael Wilson was in the process of buying a brick bungalow on Chicago’s South Side in October 2018, he thought he had been diligent in researching the flood risk.

Touring the house’s finished basement, the 43-year-old Wilson saw no outward signs of water damage, and he said the real estate agent had no knowledge of a flood history at the home or while it had been on the market. Wilson also hired a waterproofing specialist to inspect the home for evidence of past flooding or structural concerns.

Yet just two months after he bought the home, it flooded. Then this May, after several days of heavy rainfall across Chicago, it flooded again, with water streaming in the basement through the back door, seeping through the walls and bubbling up from the drains. At its peak, about a foot of dusky water soaked the family’s leather couch, tables and entertainment center.

Because the house isn’t in a Federal Emergency Management Agency special flood hazard area, Wilson wasn’t required to have flood insurance. His home insurance policy included some coverage for sewer backups, but not nearly enough to cover the damage he’s experienced.

FEMA is responsible for flagging high-risk zones where property owners with federally backed mortgages must purchase flood insurance. But FEMA’s maps are notoriously incomplete. They capture some flooding from rivers and other coastlines, yet they rarely account for the risks from intense rainfall—a growing problem made worse by urban development and climate change.

Homeowners outside of FEMA’s high-risk zones often believe they’re safe, underestimating their vulnerability. Then, once a flood hits, they must pay out-of-pocket for water damage, since they weren’t made to buy flood insurance.

Taxpayers are on the hook for flood damage, too. After major disasters, the government provides limited aid for the uninsured, and long-term recovery funds come from agencies like the Department of Housing and Urban Development.

A comprehensive new assessment of flood risk, released this week by the nonprofit First Street Foundation, exposes blind spots in FEMA’s maps to show just how vulnerable the nation’s properties are. Built by researchers from private companies and universities, the model calculates the cumulative risk for every property in the contiguous United States from rainfall, storm surge, tidal and river flooding. FEMA says 8.7 million properties are in areas susceptible to a “hundred-year flood”— a flooding event with a 1% chance of occurring in a given year. The new data says there are 14.6 million properties at risk.

While FEMA placed Wilson’s house outside the high-risk zone, this report says the property faces a “major” risk and is vulnerable to the type of flooding that would mandate flood insurance. In Cook County, where Chicago and its suburbs are located, the new model found more than 150,000 properties are at high risk—about six times as many as FEMA’s estimate.

In an emailed statement, a FEMA spokesperson said its maps “adequately” serve the intended purpose of floodplain management.

“We’re encouraged to see First Street Foundation building on federal agency datasets. ... FEMA is continuously working with our agency partners to develop a more comprehensive picture of flood hazard and flood risk across the nation.”

The first free, comprehensive resource on flood risk that’s accessible to the public, the First Street website shows the current and future flood risk at any address through 2050. The new model gives a more nuanced view than FEMA’s maps, showing how each property is susceptible to a variety of floods, including ones that are more or less severe than the 1% flood.

Flooding costs will only escalate as climate change drives tidal flooding, sea-level rise and intensifying storms. While FEMA calculates risk using historical data, the new model incorporates climate projections from the Intergovernmental Panel on Climate Change. Assuming moderate growth in global warming emissions, it predicts rapidly rising flood risk in some regions over the life of a 30-year mortgage.

In Florida, for example, one in five properties is now in a high-risk zone, but that will grow to one in every four properties by 2050. In Louisiana, the number of properties at risk will grow 70% by 2050. FEMA’s spokesperson said its maps present “snapshots in time” and “do not address future changing conditions.”

Overall, the First Street model shows many more properties at high risk than FEMA does, but there are localized areas where FEMA deems more homes at risk than First Street. Oliver Wing, chief research officer at Fathom, a flood risk intelligence company that worked on the First Street assessment, said that’s likely due to the different ways that they extrapolated, from incomplete data, the extent of the 1% flood.

The First Street scientists have published most of their methodology in peer-reviewed papers, and they’ve been well received by outside researchers, said Nicholas Pinter, a flood hazard expert at the University of California, Davis, who wasn’t involved in the First Street model. Pinter said its report “leapfrogs” FEMA’s efforts, in large part because it makes the information easily available to consumers and accounts for the future risk from climate change. In the long term, he said, it could affect real estate markets and steer homebuyers from risky areas.

The Urban Flooding Blind Spot

FEMA assesses flood risk using river flow data gathered from stream gauges, a painstaking process that leaves most of the country unmapped.

A recent report from the Association of State Floodplain Managers says FEMA has only mapped flood hazards for one-third of the miles of the nation’s rivers and streams. It estimates that Congress would need to appropriate at least an additional $3.2 billion to complete the process—about a third of what FEMA has spent on mapping since the National Flood Insurance Program was created in 1969. Maintaining the maps would require an extra $107 million to $480 million annually.

That still wouldn’t fully account for flood risks from rainfall, including in urban areas far from rivers and streams. Wing said urban flooding is hard to model, and First Street has designed its model so it can be quickly updated as data on urban risks and climate change impacts improves over time.

The discrepancy between the FEMA and First Street models is particularly stark in areas with drainage systems that can’t handle the amount of water pooling onto impermeable, paved surfaces. Runoff, inadequate sewer infrastructure and local topography can all affect whether one house floods more than its neighbors, said Marcella Bondie Keenan, director of climate planning at the Center for Neighborhood Technology, a Chicago-based think tank focused on sustainability and urban development. “None of that is shown on the [FEMA] floodplain maps.”

In short, Wing said, FEMA is “missing what happens if a crapload of rain falls downtown.”

Heavy rains are routine in the Midwest, where warm, moist air from the Gulf of Mexico typically collides with cold fronts from Canada, creating powerful storms and tornadoes. Many cities, including Chicago, are low-lying and relatively flat. Over the last two centuries, the native wetlands and prairie grasses that acted as natural retention basins for rainfall were supplanted by concrete and asphalt. These impermeable surfaces divert rainfall into sewer systems that are ill-equipped to handle intensifying storms.

Illinois has warmed about 1.2 degrees and experienced 10% to 15% more precipitation over the last century, according to the Illinois State Climatologist’s office. But the rainfall is not uniform—it’s increasingly coming down in bunches. In the Great Lakes region, the most powerful storms have increased 35% between 1951 and 2017.

Last year, state scientists updated the standard for new construction requiring state permits, including the design of storm sewers, retention ponds and road drainage, to accommodate increasing precipitation trends.

Because state and local officials use FEMA maps to help guide and justify their planning decisions, they tend to focus almost exclusively on the areas the agency has deemed high risk.

For example, the Metropolitan Water Reclamation District of Greater Chicago has spent around $22.2 million helping municipalities acquire 90 flood-prone properties, raze the structures on those properties and keep those areas as open space. The agency has designated additional high-risk zones beyond the FEMA maps, but so far, the properties purchased throughout Cook County have been located in FEMA’s high-risk zones.

The state buyout program, which gained traction after the devastating 1993 floods along the Mississippi River, has resulted in the purchase of more than 6,000 flood-prone structures and some adjacent vacant lots. While being located in the FEMA floodplain wasn’t a prerequisite, Paul Osman, the statewide floodplain chief, estimates roughly 95% of those buyouts were located within these zones.

Osman said the lack of sufficient urban flooding data means it’s easier to justify buyouts in the FEMA-designated areas.

The unmapped ones are left to flood, with little warning or remedy for homeowners.

The Toll

In Illinois alone, there has been more than $2.3 billion in documented property damage from flooding in urban areas between 2007 and 2014, according to a study led by the Department of Natural Resources. Over 90% of those insurance and disaster assistance claims were for properties outside of the FEMA floodplain—where residents weren’t required to buy flood insurance and may not have been alerted to the risk when they bought their homes.

If anything, the First Street model still underestimates risk in some properties, because its analysis is based on ground-level flooding, as are the FEMA maps. Andrew Smith, chief operations officer at Fathom, said basements can flood more frequently than the model suggests.

Ricardo Bermejo’s house in Cicero, a suburb west of Chicago, has flooded twice since 2014, though it’s outside FEMA’s high-risk zone and has a minimal risk score on the First Street website.

The last major flood occurred in May, when Bermejo, 33, found stormwater surging in through the back door after days of heavy rain across the region. He tried to hold back the water by blocking the door with a few bags of cement, but sewage water began to bubble up through the floor drain in the center of his unfinished basement.

By the end of the night, about 2 feet of murky sewer water had crept up the walls, submerged boxes of Bermejo’s belongings, soaked his furniture and seeped inside his washer and dryer.

“It kind of took me by surprise,” Bermejo said. “I was not prepared.”

The FEMA spokesperson said homeowners can voluntarily purchase flood insurance, and that nearly a quarter of all National Flood Insurance Program claims are from properties outside the high-risk areas. “Where it can rain, it can flood.”

The worsening floods often affect lower-income communities of color, which are also less likely to have flood insurance.

Between 2007 and 2016, there were nearly 230,000 flood-related claims in Chicago resulting in $433 million in payouts, according to a 2018 report from the Center for Neighborhood Technology. Of those, 87% of paid flood claims were located in communities of color.

Many of the communities with the highest totals of flood payouts were on the city’s Far South and West sides. The communities that had the highest flood payouts also tended to have higher foreclosure rates, according to the analysis.

ProPublica examined the top 10 census tracts in Cook County where First Street found the largest number of additional properties that qualify as high-risk compared with the FEMA data. Eight of those 10 tracts are majority nonwhite. That includes one census tract that is 99% Hispanic and another that’s 98% Black.

Flood insurance is crucial for helping these communities recover after disasters because they lack the wealth to rebuild and are often locked out of access to credit, said Carolyn Kousky, executive director of the Wharton Risk Center at the University of Pennsylvania. And while the government sometimes provides direct relief to uninsured flood victims, that only applies in major disasters, and the aid typically adds up to less than $10,000 per family. (Kousky is on the advisory board of First Street Foundation but did not participate in designing the model.)

Requiring more low-income residents to purchase flood insurance could price them out of their homes, but experts say Congress could avoid that by subsidizing rates based on need and by freeing up more funds for voluntary buyouts to remove flood-prone properties.

With racial and wealth gaps evident throughout the region, flooding adds another layer of financial hardship on minority communities across the Chicago area, said Cameron Davis, commissioner of the Metropolitan Water Reclamation District of Greater Chicago. Once public officials have access to information showing the full extent of the problem, they can begin to ease this burden for those who need it most.

“It’s not just about the environment. It’s not just about the economics of flooding. It’s equity, too,” Davis said. “We have some communities that cannot afford (the financial burden from flooding). There’s a big discrepancy and they’re not getting the level attention that they need — and they need a lot of help.”

Note from First Street: First Street’s flood and climate change risk estimates are based on one or more models designed to approximate risk and are not intended as precise estimates, or to be a comprehensive analysis of, all possible flood-related and climate change risks.