Skip to Highlights
Highlights

Weather-related events have cost the nation billions of dollars in damages over the past decade. Many of these losses are borne by private insurers and by two federal insurance programs--the National Flood Insurance Program (NFIP), which insures properties against flooding, and the Federal Crop Insurance Corporation (FCIC), which insures crops against drought or other weather disasters. GAO was asked to (1) describe how climate change may affect future weather-related losses, (2) determine past insured weather-related losses, and (3) determine what major private insurers and federal insurers are doing to prepare for potential increases in such losses. In response, among other things, GAO reviewed key scientific assessments; analyzed insured loss data; and contacted private insurers, NFIP, and FCIC.

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Homeland Security The Secretary of Agriculture and the Secretary of Homeland Security should direct the Administrator of the Risk Management Agency and the Under Secretary of Homeland Security for Emergency Preparedness to analyze the potential long-term implications of climate change for the Federal Crop Insurance Corporation and the National Flood Insurance Program, respectively, and report their findings to the Congress. This analysis should use forthcoming assessments from the Climate Change Science Program and the Intergovernmental Panel on Climate Change to establish sound estimates of expected future conditions. Key components of this analysis may include: (1) realistic scenarios of future losses under anticipated climate conditions and expected exposure levels, including both potential budgetary implications and consequences for continued program operation and (2) potential mitigation options that each program might use to reduce their exposure to loss.
Closed - Implemented
In response to the report, DHS/FEMA undertook the recommended to determine how seawater will surge onto shorelines around the United States as warming oceans expand and rise. According to FEMA, the study also seeks to establish how warming temperatures will affect inland flooding nationwide, potentially revealing the likelihood of more damage in some riverine areas. FEMA says it plans to redraw its flood insurance maps based on climate change projections, including the risks of more powerful storms and rising sea levels. It hopes to reduce its insurance risks and at the same time discourage people from living in damage-prone areas.
Department of Agriculture The Secretary of Agriculture and the Secretary of Homeland Security should direct the Administrator of the Risk Management Agency and the Under Secretary of Homeland Security for Emergency Preparedness to analyze the potential long-term implications of climate change for the Federal Crop Insurance Corporation and the National Flood Insurance Program, respectively, and report their findings to the Congress. This analysis should use forthcoming assessments from the Climate Change Science Program and the Intergovernmental Panel on Climate Change to establish sound estimates of expected future conditions. Key components of this analysis may include: (1) realistic scenarios of future losses under anticipated climate conditions and expected exposure levels, including both potential budgetary implications and consequences for continued program operation and (2) potential mitigation options that each program might use to reduce their exposure to loss.
Closed - Implemented
In a February 11, 2010 memo, USDA's Risk Management Agency alluded to a contract it entered into to study the issues recommended in the GAO report. The text of the memo states, "RMA has received the final report for the Climate Change Impact on Crop Insurance contract. . . The contract was initiated due to a GAO report that directed RMA to look at the possible implications of climate change on the Federal crop insurance program".

Full Report

GAO Contacts