Flood mitigation and risk reduction measures are critical to lowering insurance costs and improving affordability for homeowners, according to testimony submitted by the National Association of Mutual Insurance Companies (NAMIC) to US lawmakers.
In remarks provided to the House Financial Services Subcommittee on Housing and Insurance, NAMIC said federal support for mitigation projects - such as infrastructure upgrades, improved drainage systems, and property-level protections - would play a central role in reducing the financial impact of flooding on both insurers and policyholders.
Flooding remains one of the most widespread natural hazards in the United States. NAMIC noted that all 50 states and 99% of US counties have experienced at least one flood event over the past two decades, underscoring the scale and frequency of the risk.
The association highlighted ongoing industry efforts to better understand flood exposure and improve resilience, including investments in research and data to assess the impact of extreme weather. However, it stressed that insurance alone cannot address the growing challenge of flood-related losses without broader mitigation strategies.
A key concern raised in the testimony is the role of repeatedly flooded properties within the National Flood Insurance Program (NFIP). While these properties account for roughly 1% of policies, they generate about 25% of total claims in a given year. NAMIC said addressing these high-risk properties before future events occur could significantly reduce overall losses.
The group cited research indicating that every dollar spent on mitigation and loss prevention can yield up to $13 in avoided future damages. Based on this, NAMIC urged policymakers to prioritise proactive investment in flood resilience as a cost-effective approach to managing risk.
NAMIC also expressed support for maintaining targeted subsidies within the NFIP to assist vulnerable homeowners, while calling for greater transparency around flood risk. Providing clearer information to homeowners about exposure levels, it said, would help individuals make more informed decisions about property purchases and insurance coverage.
The association concluded that addressing flood risk will require coordinated action among federal and state governments, insurers, communities, and property owners, with mitigation efforts forming the foundation of long-term affordability and resilience in the insurance market.
