The stark reality in Massachusetts is that coastal communities are statistically underinsured for flood-related damage and as flood risks continue to rise with increasing “historic” storms, local communities that engage their insurance are the ones that will mitigate damage and recover more quickly.
This was the central topic addressed Friday by two top flood insurance specialists who spoke to a spectrum of elected officials, researchers, engineers, marine officials, environmentalists and impacted residents at the latest Northeast Coastal Coalition meeting at the Essex Town Hall. Joy Duperault, director of the Flood Hazard Management Program for the state’s Department of Conservation and Recreation and Joe Rossi, chairman and executive director of the Massachusetts Coastal Coalition and a representative of the insurance industry, were the speakers at the session hosted by Massachusetts Senator Bruce Tarr, who heads up the coalition.
Insurance is “growing in importance and concern,” according to Tarr. “This is the kind of [collaborative] format that gets things done,” he said.
Rossi and Duperault told those at the meeting the fundamental challenge of underinsured coastal communities lies in homeowners’ low confidence in insurability. Flood zone maps from the Federal Emergency Management Agency (FEMA) have become more conservative and restrictive, determining risk factors that drive pricing for insurance, whether private or federal (called the “National Flood Insurance Program” or “NFIP”).
Perhaps because of this, according to Duperault, who coordinates the NFIP in Massachusetts, more than $32.5 billion in coastal Massachusetts property is not currently covered by insurance. 341 of 351 communities are in the FEMA National Flood Insurance Program, and as of September 2019, there were 60,229 active policies with an average annual premium of $1,280. Coastal communities have 49,385 policies, or 82 percent of the state total. Properties covered by flood insurance in these communities is $13.1 billion — 83 percent of the state’s total. Of these, 3,451 were structures designated by FEMA as “repetitive loss structures,” which are defined as two or more claims of more than $1,000 paid within a ten-year period since 1978. There are four North Shore communities in FEMA’s top ten Massachusetts towns for repetitive loss and they are Revere, Nahant, Peabody and Swampscott.
This is not unusual, she said, but it is dangerous. In Houston following Hurricane Harvey in 2017, 70 percent of storm damages were not covered by insurance.
A big danger, Duperault said, comes when communities believe national disaster money will drive recovery. Federal disaster funds are not insurance, she said. They are grants, and receiving those grants is a slow and complicated process that yields a small fraction of a community’s loss from flooding.
Coastal communities in particular recover far slower when they are underinsured. They take, Duperault said, “much, much, much, much more time to recover than insured communities.”
Insurance is the second topic tackled by the Northeast Coastal Coalition, which has tasked itself with addressing coastal resilience management in communities from Cape Ann to the New Hampshire border through collaboration. Its first meeting in July brought together several state agencies and branches of government, the U.S. Army Corps of Engineers, a series of environmental non-profits, university researchers and a variety of other groups. They reviewed a Regional Dredge Feasibility Study from the Woods Hole Group funded by a $50,000 state grant and administered by Essex Selectman and Coastal Coordinator at the Merrimack Valley Planning Commission Peter Phippen.
The idea was to explore regionalized solutions to manage flooding expected from climate change. Collaboration is key. So is understanding the role of the Great Marsh, which runs from southern New Hampshire, through the Merrimack Valley and down through Ipswich and Essex, ending in Gloucester. Researchers say this massive swath of marsh acts as a natural sponge to absorb flooding and sea rise.
Rossi, who represents the private flood insurance industry, acknowledged that storms and floods are increasing in frequency. He said private insurance is a big part of the solution. There are 140 private flood programs in the U.S., he said, and just one national flood program. The insurance industry is keenly interested in solutions but with conflicting federal bills to address flood reform, progress is hard, said Rossi.
“Its been difficult to truly move the needle on resiliancy,” he said. “Business as usual” is not enough.
That said, Rossi said there are myriad steps homeowners can take to dramatically reduce risk of flood damage and increase success in the face of weather-related flooding. Understanding building codes, managing insurance in a way that understands the differences and benefits of federal programs and private insurance can go a long way, he said.
It’s no accident that Essex is hosting these meetings. With its coastal marshes, Essex, in particular, has proven to be a perfect “lab” for researchers, especially after a chance 2018 storm drove record flooding — completely submerging the entirety of the downtown causeway, cutting off town access from one end to the other, disrupting businesses and dumping an unprecedented amounts of sand sediment from the ocean deep into the marshes. The situation was so unique that Essex became the subject of grant-funded research on coastal resilience by the University of New Hampshire to track migration of the sediment and study the resiliency and rebound of the marsh grass. The next step is to track recovery of the marsh grass and habitat, which would provide data on whether replacing natural sediment from regional dredging could offer a partial solution to fortify the coastal areas against flooding.
The role of insurance and the insurance industry’s ideas about flooding and climate change and coastal resilience is of particular interest since actuarial tables for expected land loss is baked in and drives economic projections. Tarr said it’s a needed vector into a central problem, another view on an important issue.
The next meeting of the Northeast Coastal Coalition will take place in January and it will be, again, hosted by the town of Essex.