Flooding Is Vertical in Nature: NFIP Flood Zones Should Be Too

Poulton Associates Challenges Outdated NFIP Flood Mapping

SALT LAKE CITY, Utah, March 25, 2025 /PRNewswire/ -- Flooding remains one of the most destructive natural disasters in the United States, causing billions of dollars in damage annually. For decades, the National Flood Insurance Program (NFIP) has designated Special Flood Hazard Areas (SFHAs), commonly known as flood zones, as a tool for assessing flood risk. These zones guide lenders, insurers, and property owners in determining flood insurance requirements.

In today's world of advanced technology, flood zone designations should offer precise and predictive risk assessments. Unfortunately, past disasters have repeatedly demonstrated that the current approach falls short.

The NFIP's reliance on static, horizontally defined flood zones is an outdated method of evaluating flood risk. This approach often misleads property owners—some at significant risk forego coverage, while others far above flood levels are unnecessarily burdened with insurance requirements. A shift to vertical flood zone assessments, like those used by CATcoverage.com, which considers the elevation and individual flood risk characteristics of structures, is a more effective solution.

Why Current Flood Zones Are Failing

NFIP flood zones rely on historical data and generalized measurements, covering vast geographic areas without distinguishing between individual structures' specific vulnerabilities. These horizontally drawn maps fail to account for critical differences in elevation and proximity to water, leading to inaccurate risk assessments.

For example, imagine two homes in the same coastal flood zone. One sits 12 feet above the Base Flood Elevation (BFE) on a hill, while the other rests in a low-lying area prone to inundation. Despite their vastly different exposures to flooding, both are categorized the same under the current system.

The consequences of this oversimplified approach are significant:

• Unnecessary Burden: Property owners at low risk may be compelled to purchase flood insurance.
  
  
• Underinsurance: Structures within high-risk vertical zones but outside horizontal flood zones often go uninsured.

This was the case in Asheville, NC, where homes in vertical flood zones, but not in designated horizontal flood zones, suffered devastating uninsured losses. Only 0.72% of over 62,000 homes in Asheville carried flood insurance, as most were excluded from NFIP's horizontal zones. (Source: AVLWatchdog.org)

Vertical Assessment: A Smarter Approach

Flooding is a multi-dimensional peril and managing it with one-dimensional maps is increasingly indefensible. A vertical approach to flood risk, which evaluates a structure's elevation and surrounding topography, offers a more precise and equitable alternative. This approach considers:

• Elevation Data
  
  
• Land Slope
  
  
• Proximity to Water
  
  
• Topographical Features

CATcoverage.com is at the forefront of this evolution, leveraging advanced geospatial data, actuarial analytics, and artificial intelligence to generate flood risk scores for millions of individual structures.

The Cost of Inaccuracy

The NFIP's current system introduces systemic inaccuracies, leading to:

• Misinformed Property Owners: Many building owners would make very different choices if flood zones communicated their risk of flooding more accurately.
• Coverage Gaps: High-risk structures outside horizontal zones remain uninsured, exacerbating losses.

A granular, vertical approach could align premiums with actual risk, making flood insurance more affordable for low-risk properties while mandating coverage for high-risk structures. This modernization would distribute risk more evenly, alleviating the $50 billion burden taxpayers have born thus far from the practices of the NFIP.

Modernizing Flood Risk Management

Each structure has a unique flood profile. CATcoverage.com's personalized risk assessments already demonstrate the feasibility of a nationwide system that evaluates every building's flood vulnerability for inclusion in the nation's flood zone. This would enable:

• Improved Protection: Tailored risk profiles allow property owners to better prepare.
  
  
• Wider Coverage Adoption: Affordable premiums encourage more homeowners to insure.
  
  
• Enhanced Community Resilience: Accurate data leads to better disaster planning.

Moving Beyond Horizontal Flood Zones

The time for change is now. Horizontal flood zones are no longer sufficient in an era where precision is achievable. By adopting a vertical, structure-specific approach, the NFIP can deliver more accurate risk assessments and unlock a host of benefits, including reduced premiums, better coverage, improved resilience, and happier taxpayers.

Ready to Learn More?

Insurance producers can begin offering tailored flood insurance solutions through CATcoverage.com in minutes. Empower your clients with smarter, more personalized flood protection today.

SOURCE Poulton Associates, LLC