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Scientists call for National Flood Insurance Program reform
By Insure.com staff

Climate change and development have have put coastal areas at greater risk of flooding and increased potential costs for taxpayers, according to a new report from the Union of Concerned Scientists (UCS), an alliance of 400,000 scientists and citizens based in Washington, D.C.

The report calls for reforming the National Flood Insurance Program and state-backed wind insurance programs to discourage risky development. In a warming world, North Atlantic-forming hurricanes will likely get stronger and more destructive, the scientists said.

"The problem is two-fold," report author Rachel Cleetus, a senior climate economist at UCS, said in a press statement. "The coasts are becoming more populated and built-up, so we have more people and more valuable property in harm's way. At the same time, climate change is contributing to sea level rise, generating more intense hurricanes, and causing bigger, more damaging storm surge. The result is that coastal residents and business owners are at increased risk, and taxpayers nationwide are looking at shelling out more money to help with post-storm rebuilding efforts."

The report calls for a two-fold solution -- reduce carbon emission to help slow global warming and build resilience on the coasts, including through insurance program reforms.

The National Flood Insurance Program should set rates that reflect true risk and phase out subsidies, which encourage unwise development in flood-prone areas, the report said.

"People are continuing to move to the already crowded coasts and we're often rebuilding flooded properties in the same places and same ways they were built before being hit by storms," Cleetus said. "Taxpayers are paying for this risky behavior by subsidizing coastal property insurance and funding large payouts for disaster relief when major storms, like Hurricane Sandy, hit."

The UCS report notes that many state-subsidized wind insurance programs also set artificially low rates and create financial exposure for state taxpayers.

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