Flood insurance leaves millions exposed nationwide

The national flood insurance system is leaving a wide gap between the homes most exposed to flooding and the properties that carry coverage. An Associated Press review found 4.5 million federal policies nationwide, covering just 2.4% of properties. By comparison, 8.4% face severe or extreme flood risk.

Eastern Kentucky shows the problem sharply. During the deadly 2022 floods, only 2.1% of properties in the affected area had insurance, while about 47% faced severe or extreme risk. FEMA’s maps placed just 18% of damaged buildings in a high-risk zone. The maps often miss flooding caused by intense inland rainfall, and many are outdated. Similar gaps appear in coastal Louisiana and other poorer communities.

Coverage is available to homeowners, renters and businesses, but homeowners typically buy policies covering up to $250,000 for the building and $100,000 for belongings. The usual annual premium is about $1,100, roughly 90% higher than five years earlier. Risk Rating 2.0 improved the match between premiums and property risk, but it also raised prices for many policyholders. FEMA says better building rules, zoning and private coverage are needed. Its replacement mapping effort has no clear schedule, while broader reforms in Congress remain stalled.