Senator Scott Pushes Local Solutions to Flood Insurance, Preparedness

WASHINGTON — U.S. Senator Tim Scott (R-S.C.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs called for federal policies that incentivize local, innovative solutions to flood preparedness and mitigation. At yesterday’s Senate Committee on Banking, Housing, and Urban Affairs hearing on reauthorization of the National Flood Insurance Program (NFIP), Ranking Member Scott, who spent over two decades in the insurance business, highlighted his firsthand experience living through severe floods in South Carolina as the foundation for his legislation – the Repeatedly Flooded Communities Preparation Act. This legislation would encourage flood-prone communities to take preventative action and end the costly cycle of repeated flooding and rebuilding.

Ranking Member Scott emphasized the need for comprehensive reform to the NFIP. Reforms must ensure that local communities, policyholders, and the general public understand their risk of flooding, and have the tools needed to address it.

Watch Senator Scott’s opening remarks here.

Ranking Member Scott’s opening remarks as delivered:

Thank you, Mr. Chairman.

Before we get started, I’d like to take the time to welcome a Charleston native, Mr. Kaniewski, as a witness today.

I can’t think of a more helpful perspective in dissecting these issues that are really local in perspective.

Although you now live in Minnesota – I’ve never met someone who left Charleston actually – full time. Please come home soon, we really need you back. We need all the smart-thinking individuals back in Charleston, South Carolina. But we thank you for being here today.

The National Flood Insurance Program (NFIP) comes into play when we start thinking about how to mitigate the risks that are so impactful and negative to communities across the country.

As we consider potential reforms to the NFIP, we must keep in mind local perspectives and not just those of Washington bureaucrats.  

Because we all know that the most effective policymaking typically happens closer to the problem, not farther away from that problem. 

So our federal programs should foster local, innovative solutions—not regulatory red tape. 

Y’all have heard me say this before, that as a lifelong Charlestonian and South Carolina resident, as well as an insurance professional for more than 20 years – having sold flood insurance policies – it’s really important for us to understand and appreciate the devastation caused by flooding.

There’s no doubt that if you’re a Charlestonian and if you were around in 1989, Hurricane Hugo devastated our community in ways that very few natural disaster have before and frankly, since. The storm surge was so bad and so high, that it literally left boats in the middle of downtown in the streets of Charleston.

More recently, Hurricanes Matthew, as well as Florence devastated towns throughout my state, and left some towns submerged.

As a matter of fact, the town of Nichols, South Carolina – a very small town – was hit by both storms so bad that more than half of the houses in that small community found themselves underwater.

And the devastation of trying to rebuild 24 months later – again – was undeniably and frankly impossible. But the good news is when you’re surrounded by your friends and your family, the impossible becomes possible. And they worked really hard to start the process of rebuilding very quickly, and frankly, very successfully.

This type of repeated flooding makes recovery harder, and naturally, can even cause some residents to lose hope – and certainly a part of the town – residents left.

It’s one of the reasons why I’ve re-introduced the Repeatedly Flooded Communities Preparation Act, which would help communities suffering from frequent flooding plan for the next storm, and hopefully, lower the risk.

It’s my hope that by encouraging flood-prone areas to reduce the impact of future storms, residents will be able to focus on long-term recovery – long after the storm surge recedes.

And recovery doesn’t simply mean rebuilding, it also includes uplifting our communities. It includes making sure that families and neighbors learn to work together – that the synergy in the aftermath of a disaster is where community, and the glue of community, really manifests and reveals itself.

South Carolinians who have lived through repeated flooding know this, and my home state has taken action to prevent this outcome.

South Carolina’s recent dedication of resources and strategic mitigation efforts are second to none.

In 2023, the state’s budget included significant funding for mitigation efforts that would reduce flood damage from future storms. 

Backing up that investment, the South Carolina Office of Resilience released a nationally praised “Statewide Risk Reduction Plan,” identifying the communities most vulnerable to floods and targeting mitigation resources to protect those residents.

These are local solutions to local challenges – and they will make a huge difference in the lives of South Carolinians.

And while I recognize that what works in South Carolina may not work in places like Senator Cassidy’s Louisiana or Chairman Brown’s Ohio, I’m confident that similar, locally based solutions and approaches could make a huge difference, not only in those communities, but to the National Flood Insurance Program itself.

To support these levels, we must have substantial reform to the NFIP.

The status quo is not an option. The program is financially insolvent, with over $20 billion – $20 billion in debt. 

Instead of educating communities and homeowners on the risks they face, the program’s outdated flood maps and lack of transparent data often obscures the risks. 

Without a well-functioning and financially solvent insurance system, the NFIP will fail to provide cities and towns with the tools they need to be resilient.

And, if the NFIP is unable to provide local communities with improved mapping and mitigation resources, the financial health of the insurance program will continue to deteriorate.

When I say that – especially with my legislation I’ve re-introduced – we have to recognize that the NFIP pays out 30% of its resources to about 1% of the properties that consistently and repeatedly are flood victims again, and again, and again.

1% of the exposure absorbs 30% of the resources – and that’s an opportunity for us to look to the local communities to create strategies to perhaps not rebuild there, and that will take a local engagement to mitigate that risk for the nation, for the program, and frankly for the communities where they happen. 

Comprehensive reform of the program is essential.

One final and important point before I close: Congress cannot allow the NFIP to lapse.

Most often we talk about states like Florida, or South Carolina, or Louisiana – where they pay a disproportionate share of the premiums that go into the NFIP. The truth is that whether you’re in Ohio, or California, whether you’re in the New Jersey, New York area, where Hurricane Sandy – $8.8 billion – Hurricane Harvey – $9 billion.

The number of flood insurance policies in place? Essentially nonexistent. So not only do we need to have a comprehensive reform of the program itself, we need to have a better education that floods don’t simply happen when you live near the water. Floods today happen throughout the country.