Perfect storm

Kim Pierce first ventured back to her home eight days after the storm. Under normal circumstances, Pierce is a self-described “crier.” But this time, the tears wouldn’t come. She just felt numb, and her eyes remained stubbornly dry as she took in the devastation.

A filthy water line stretched unbroken just below the ceiling in every room, and dark mold crept up the walls to meet it. Swollen doors splintered off their hinges, and Pierce’s clothes lay limp and mildewed on the floor. At her feet, the christening gown handed down for generations in her family lay trampled in the muck.

Pierce had moved into this condominium in Asheville, N.C., four days before Hurricane Helene shattered the blue-skied glory of the Appalachian autumn and sent the Swannanoa River racing through the quiet neighborhood. She hadn’t even finished unpacking. Many of her belongings were still boxed up in the garage when it flooded 8 feet deep.

Pierce didn’t have flood insurance to cover her loss. Neither did many of her neighbors. In fact, across North Carolina, where Helene created an estimated $60 billion in damage, over 90% of people whose homes suffered water damage didn’t have flood insurance.

Kim Pierce looks through photo albums she salvaged. Photo by Gabriel L. Barnes / Genesis

This worst-case scenario exposed glaring breakdowns in a flood insurance and mapping system that leaves homeowners vulnerable and taxpayers on the hook for billions. And it’s not just a problem in North Carolina. One 2018 report found about 70% of homes in the nation’s riskiest flood areas don’t have flood coverage. The issue has become all the more pressing as storms pounding the U.S. mainland continue to worsen, endangering areas previously considered low-risk.

Since the 1960s, insurers have excluded flood damage from regular homeowners policies, viewing it as “uninsurable,” according to Donald Hornstein, a professor specializing in environmental and insurance law at the University of North Carolina School of Law. For one thing, flood risk depends on a lot of variables, making it difficult to understand and predict. And it’s expensive: A single inch of floodwater can cause up to $25,000 in damage to a home, according to the Federal Emergency Management Agency (FEMA). That means a major flood could potentially bankrupt a company responsible for making payouts across a devastated area.

Recent weather trends have only escalated the magnitude. All but one of the seven costliest storms in U.S. history—Hurricane Andrew in 1992—struck in the last 20 years. And since 2010, six states, including North Carolina, have run up insurance claim tallies topping $1 billion. “There’s no question but that there are greater losses now than ever before in all of U.S. history,” Hornstein said.

As a result, most private insurers eschew the flood market, believing any accurately priced coverage would be “so expensive no one could afford it,” Hornstein said. He estimated private residential flood policies make up only about 5% of the national market. Instead, the vast majority of policies come from the National Flood Insurance Program (NFIP), government-­backed coverage managed by FEMA. Local communities can opt into the NFIP in exchange for following federally mandated building codes.

Congress created the program in 1968, just a few years after Hurricane Betsy wreaked havoc on coastal Louisiana. Before that, no one expected any kind of disaster insurance or assistance from the government, according to Leonard Shabman, a senior fellow at the environmental nonprofit Resources for the Future. To recover from floods, people relied on friends and neighbors.

But, over time, the government started to take on a new role in people’s minds. “All of a sudden, there’d be a flood and the president would show up and say, ‘Don’t worry, we’re going to take care of you,’” Shabman said. That political posturing has created a fundamental misunderstanding of FEMA’s intended role and legal limits, Shabman added, leaving people with the impression, “If I get flooded, FEMA is going to make me whole again.”

But does that actually happen? “Not a chance,” Shabman said.

Kim Pierce lsurveys the condition of her condo five months after the flood. Photo by Gabriel L. Barnes / Genesis

BACK IN EAST ASHEVILLE, Kim Pierce surveyed the remains of what was supposed to be her new safe haven: affordable, beautiful, and close to her six children and four grandchildren. It had been a hard decision to downsize from the house where she had raised her kids—the place she had celebrated their birthdays and achievements, and the place she had grieved the disintegration of her marriage 10 years earlier. She had forged a hard-won faith in God’s goodness there. But Pierce’s children are now grown, and she had decided it was time for something smaller.

After a careful, three-month search, Pierce settled on a sturdy, one-story condo with green-gray stucco walls and a wide front porch. She paid for it in full using cash from the sale of her previous house. The condo stood near a pond, so her grandbabies called it “CoCo’s lake house.” They daydreamed together about catching frogs and feeding geese.

Now, a pile of debris fronted the house, and a yellow slip of paper taped to the wall cautioned people against entering.

Although Pierce’s condo was near the Swannanoa River, a pond and two roads separated her from the water. Technically, the condo stood in a 500-year floodplain, a moderate hazard designation meaning it had a 0.2% annual risk of flooding, according to FEMA calculations. But just next door, the neighbor’s house fell in a 100-year floodplain—a Special Flood Hazard Area where law requires anyone paying off a federally backed mortgage to purchase flood insurance.

But the neighborhood hadn’t seen any serious flooding since Hurricane Frances in 2004, and it never crossed Pierce’s mind the river could come so far out of its banks.

This kind of information breakdown is a major reason homeowners don’t buy flood insurance, according to Shabman. Lots of people assume their homeowners policies cover floods or simply don’t realize their level of risk. Flooding often seems like “too remote a possibility” to justify the cost of an extra policy. Although FEMA reports the average premium at less than $900 annually, prices vary widely across regions and can climb well over $3,500 in high-risk areas like coastal Louisiana.

Shabman said people often face a tough trade-off: “Buy this policy against something that might happen, or maintain my cellphone service?” That creates an incentive for people to drop their policies as soon as they can, regardless of risk.

But there’s another big factor at play: inadequate flood maps. FEMA manages a system of flood maps to track and communicate flood risk levels, but these maps are often “quite out of date,” according to Andrew Rumbach, a senior fellow with the Urban Institute. This is especially true in areas that haven’t recently experienced a disaster, since the agency often redraws its maps after major floods.

On top of that, Rumbach said the statistical models behind these maps are backward-looking and don’t factor in the possible effects of “future climate change.” It’s also hard for them to keep up with new building projects that create additional rain runoff and alter flood paths.

According to a 2024 Washington Post analysis based on data from the First Street Foundation, the number of properties at significant flood risk in North Carolina’s mountains could be seven times higher than what FEMA flood maps currently show. Nationwide, First Street estimated roughly twice as much land falls inside 100-year floodplains than FEMA’s categories currently indicate.

Personnel from a FEMA Urban Search & Rescue Task Force inspect properties destroyed by flooding from Hurricane Helene in Swannanoa, N.C. Loren Elliott / The New York Times / Redux

ALL THIS UNINSURED FLOOD RISK adds up to a big bill for taxpayers. To date, FEMA is drowning in over $20 billion of debt—money spent mostly in the aftermath of Hurricane Katrina in 2005. Before Katrina, the agency had no debt. Two years later, it owed over $16 billion. UNC professor Hornstein said that happened because the NFIP is “designed to handle most storms, but not extreme storms.” As a result, it hasn’t been able to recover solvency despite Congress forgiving $16 billion of its debt in 2017. When FEMA goes over budget, the agency has to beg Congress for yet another short-term spending measure to cover the shortfall.

Although the NFIP is working on updating and expanding its flood zones, Hornstein said it’s an expensive and politically fraught process. Lots of jurisdictions fight redistricting because of the added burden to real estate development in newly designated flood zones. After a storm, Hornstein said, most people think, “If only the flood zones were right, everyone would have had flood insurance.”

But before a storm, everybody thinks, “This will never happen to me.”

Political spats also hamper FEMA reforms at the national level. Starting in October 2021, the agency rolled out a new pricing system called Risk Rating 2.0, designed to adjust rates to more accurately reflect flood risk. But the reforms led to rate increases for most policyholders, and 10 states took FEMA to court in the Eastern District of Louisiana in June 2023, calling the new system “a natural disaster of its own.” The case is still pending.

As FEMA continues to hemorrhage funds, a minority of conservative voices have called for the agency to shutter the NFIP completely. In their Project 2025 policy proposal, Heritage Foundation authors urged the Trump administration to wind down the NFIP and replace it with a private solution. They argued the current system is merely “subsidizing flood insurance” through continual “tax-payer funded bailouts.” On Jan. 24, President Donald Trump issued an executive order ­calling for a review of FEMA’s effectiveness.

But Shabman with Resources for the Future disputes the idea the private sector would rush to create affordable flood insurance products if only the NFIP got out of the way. He said insurance companies have historically shown “zero interest” in wading into the flood insurance market, and that’s unlikely to change now.

Getting rid of the NFIP isn’t the only way to get the program out of the red, Shabman argued. He said pressure from Congress has kept premiums artificially low since the 1980s, but that the new rate hikes under Risk Rating 2.0 would be enough to “make the NFIP completely fiscally solvent” if Congress canceled the agency’s remaining debt.

And while some argue the NFIP subsidizes risky behavior, Shabman believes there’s “a legitimate public policy case” for helping moderate-to-low-income families access the safety net of flood insurance. “So much of the debate around flood and so forth assumes that nobody lives in a flood zone now,” Shabman said. “But that’s not the case—especially since floodplains are always shifting.”

Instead of eliminating the NFIP, Shabman recommends insurers make flood insurance a separate coverage within regular homeowners policies, creating an “opt-out” system where people are enrolled in flood insurance programs unless they explicitly decline. He said this would at least require brokers to sit down with clients and help them understand their options—and make sure they understand flood insurance is an add-on never covered by a stand-alone policy.

Shabman believes any successful policy solutions must “start where people are,” since most areas have some degree of flood risk and people have all kinds of reasons for living where they do. “If there’s a 1% chance of it flooding, that’s a cost of being there,” he said. “But there’s a benefit of being there, too.” Things like affordability, a beautiful view, or a family home.

The Urban Institute’s Andrew Rumbach agreed. “There’s a lot of things that are important, including being safe from floods,” he said. “But it’s also important that you’re a part of your community.”

And Rumbach said winding down the NFIP would probably be a pretty tough sell politically—since politicians on both sides of the aisle have constituents who rely on the program. “Everyone agrees that [the NFIP] doesn’t work as well as it should, but I don’t think there’s a huge group of people who are asking for it to be taken away completely,” he said.

A FEMA worker works on a claim by a resident of Marion, N.C. Eduardo Munoz / Reuters / Redux

MAJOR FLOODS don’t happen every day, even in floodplains. Living near rivers, lakes, or coastlines is a choice University of North Carolina Asheville environmental science professor Jeff Wilcox compares to “rolling the dice.” It’s a game of chance that can pay dividends: lovely scenery, a natural water source, or rare flat ground in the mountains. But when floods do arise, those without insurance tend to go bust—big-time.

Homeowners who don’t have insurance are eligible for up to $42,500 in housing assistance. That might be enough to cover much of the damage suffered by someone like Kim Pierce. But for others, whose homes sustained structural damage, or were completely destroyed, it won’t come close to funding a full recovery. And homeowners who had mortgages on their properties must still repay the original loan, even as they seek additional loans to fund the repair work.

Oftentimes, churches, neighbors, and aid groups stand in the insurance gap to help hurricane survivors get back on their feet. In Pierce’s neighborhood, cleanup crews arrived from Hawaii, Pennsylvania, Wisconsin, and the Carolinas to help muck out the water-damaged homes. Volunteers with Baptists on Mission cleaned out Pierce’s garage and even squirmed into the house’s crawl space, carrying away buckets of mud. “I have never seen love in action like I’ve seen with this storm,” she said.

“This is the most humbling and most beautiful thing you could ever have done for me,” she told one of the volunteers. The man told her it was enough just to see Pierce standing there, smiling through her tears, despite everything.

Private relief groups have played a critical disaster response role after other major storms, too. After Hurricane Harvey devastated southeast Texas in 2017, organizations like the Red Cross and Samaritan’s Purse raised nearly $1 billion in donations and helped restore thousands of homes.

But that still pales in comparison to the vast need. Hurricane Harvey alone created an estimated $125 billion worth of overall damage, including about 160,000 uninsured homes.

“Faith-based organizations are fantastic, but they don’t have $30 billion to give to Asheville after this one storm,” UNC’s Hornstein said. By now, FEMA and the NFIP have paid out over $640 million to storm survivors in North Carolina.

Back in Pierce’s neighborhood, the volunteers are long gone. The piles of debris in front of her home have vanished. But the structure itself remains in shambles. Even though Pierce received FEMA’s maximum compensation for the house, she doesn’t feel able to live there again. Not so close to the river.

Instead, Pierce applied for a federal buyout. But she won’t hear back about that until at least May or June. In the meantime, she’s stuck paying HOA dues—$500 a month. Now that the first wave of adrenaline has faded, Pierce said reality is sinking in. Her dream home—and retirement investment—is gone. At age 56, she’s having to start all over again.

Some days are extremely difficult, but Pierce said she’s fighting to trust God’s faithfulness. “I can’t see what’s going to happen tomorrow,” she said. “But I know He’s gonna take care of me.”