Investigating Flood Insurance Mark Collette of the Houston Chronicle tells NPR's Lulu Garcia-Navarro about his investigation into the National Flood Insurance Program.
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Investigating Flood Insurance

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Investigating Flood Insurance

Investigating Flood Insurance

Investigating Flood Insurance

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Mark Collette of the Houston Chronicle tells NPR's Lulu Garcia-Navarro about his investigation into the National Flood Insurance Program.

LULU GARCIA-NAVARRO, HOST:

After a hurricane, severely damaged homes are supposed to be elevated or removed from flood plains. It's a central pillar of the National Flood Insurance Program. But according to a recent Houston Chronicle investigation, that's not being enforced. Instead, these homes get rebuilt, and then they flood again. Nationwide, the cost to taxpayers is more than $1 billion. The paper also reports that Houston has more flooded properties with evidence of this problem than any other city. Mark Collette is the reporter for the Houston Chronicle who did the investigation. And he joins me now. Welcome.

MARK COLLETTE: Hi. Thank you for having me.

GARCIA-NAVARRO: So can you walk us through the process of what's supposed to happen in the wake of a hurricane like Harvey, which hit Houston last summer? What defines a severely damaged property?

COLLETTE: So, at a minimum, a severely damaged home is one that is damaged 50 percent or more of its pre-flood property value as determined by local building officials. Some communities have more stringent standards with a lower threshold than that. But at a minimum, it needs to be 50 percent.

GARCIA-NAVARRO: And you did this investigation. And what did you find was actually happening?

COLLETTE: So we had heard anecdotally after previous storms like Hurricane Ike that severely damaged Galveston in 2008 and other storms around the country that there was kind of a nod and a wink going on on some of these damage assessments, where officials were bringing in the assessments lower than what they actually should have been so that residents would not be forced to have to take on expensive home elevation projects in order to elevate their properties out of the flood plains. These are well-intentioned building officials who are responding to a catastrophe in their community and faced with, you know, hundreds or thousands of residents who really just want to get back home more than anything else.

The problem is that when you allow that to happen, people rebuild their homes at ground level. And then they're no better off in the future for the next storm than they were for the last one. And so they're put back in harm's way. And this is how you end up with, you know, our finding that there are some homes that had dozens of claims, flood insurance claims, in the flood insurance program worth millions of dollars, even though the house itself might only be worth $150,000. And so this is one of the reasons why the National Flood Insurance Program is insolvent today, and Congress is looking for ways to repair the program.

GARCIA-NAVARRO: Well, what is the most egregious thing you found? I mean, I think you - in your reporting, there was the story of one home that had millions of dollars of claims.

COLLETTE: There's a home in Houston on the San Jacinto River, which is a perennially flood-prone river. It went way, way, way out of its banks during Hurricane Harvey. And it's had 22 flood insurance claims worth - I think it's about $9 million, even though the house is only worth about $300,000. And the interesting thing about this is that we found that this process on that particular property could've been stopped in 1989 because that's the first time, according to the data, that the house went over that 50-percent threshold. So if somebody at the local building level or the county level had held the line and said, you have to elevate or demolish this house, the string of claims on that property would've stopped right then. And so that's an extreme example. But that's basically what's happening in many communities across the country after these large-scale floods.

GARCIA-NAVARRO: Who's to blame?

COLLETTE: The National Flood Insurance program itself has some design flaws that I think are widely recognized that Congress is trying to fix right now. One is that premiums don't fit the actual level of risk. So you can get heavily subsidized flood insurance to live in places that you probably shouldn't be living that are deep in the floodplain. But also, it falls on local building officials to enforce these policies after these disasters. That, of course, is a tall order if you can imagine, you know, a city like Houston and Hurricane Harvey. We had 204,000 homes and apartment complexes that flooded during that storm. And even though we're one of the largest cities in the country, even our building department isn't big enough to suddenly handle 204,000 damage assessments on its own. So if this problem is going to be fixed, it's probably going to take legislation to do it. And the National Flood Insurance Program is up for reauthorization at the end of this month. And Congress has a number of proposals that they're considering for reforming the program. But, so far, none directly address this issue of substantial damage assessments in the aftermath of a disaster.

GARCIA-NAVARRO: I got to ask you - that house that had the $9 million worth of claims - still standing?

COLLETTE: Still standing - the last I checked in with that property owner, he was hoping to get buyout money. It's a long and frustrating process for these homeowners because it can take, you know, two, three, four years to get access to those buyout funds. And in the meantime, you know, the incentive is to just rebuild and get back in your house. So a lot of people are watching this hurricane form out in the Atlantic right now and just crossing their fingers and hoping that we're not going to have another storm before they can make those decisions to reduce their risk.

GARCIA-NAVARRO: Mark Collette, reporter at the Houston Chronicle, thank you very much.

COLLETTE: Thank you very much.

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