Flooding Is the Most Expensive Natural Disaster -- GAO Examines FEMA Financial Risks and Mitigation
Description
On March 26, 2026, Alicia Puente Cackley, Director of Financial Markets and Community Investment at the U.S. Government Accountability Office, delivered testimony before the Subcommittee on Housing and Insurance, House Committee on Financial Services, U.S. House of Representatives.
This testimony examines federal efforts to mitigate flood risk and address the fiscal challenges of the National Flood Insurance Program (NFIP). It focuses on how mitigation strategies--such as property acquisitions, elevation, relocation, and floodproofing--can reduce long-term flood losses and improve program sustainability.
GAO found that a small percentage of properties, known as repetitive loss properties, account for a disproportionate share of NFIP claims. While these properties make up about 2.5 percent of policies, they represent approximately 48 percent of claim payments by dollar value.
From 1989 through 2025, FEMA mitigated most properties through acquisitions, which accounted for about 72.5 percent of mitigation efforts, primarily funded by the Hazard Mitigation Grant Program. However, the mitigation process faces significant challenges, including lengthy and complex procedures, limited capacity at the state and local levels, and financial constraints. These barriers can discourage participation and limit the effectiveness of mitigation efforts. GAO also found that NFIP continues to pose a fiscal exposure to the federal government because premium rates do not fully reflect flood risk. Without improvements to mitigation efforts--particularly targeting repetitive loss properties--program costs are likely to increase for both policyholders and taxpayers.
GAO has made nine recommendations to FEMA and eight matters for congressional consideration to improve mitigation processes, address acquisition challenges, and reduce NFIP's fiscal exposure while maintaining affordability. As of March 2026, FEMA has implemented four of these recommendations.
This testimony highlights the importance of strengthening mitigation strategies and targeting high-risk properties to reduce long-term costs and improve the financial stability of the NFIP.
This testimony examines federal efforts to mitigate flood risk and address the fiscal challenges of the National Flood Insurance Program (NFIP). It focuses on how mitigation strategies--such as property acquisitions, elevation, relocation, and floodproofing--can reduce long-term flood losses and improve program sustainability.
GAO found that a small percentage of properties, known as repetitive loss properties, account for a disproportionate share of NFIP claims. While these properties make up about 2.5 percent of policies, they represent approximately 48 percent of claim payments by dollar value.
From 1989 through 2025, FEMA mitigated most properties through acquisitions, which accounted for about 72.5 percent of mitigation efforts, primarily funded by the Hazard Mitigation Grant Program. However, the mitigation process faces significant challenges, including lengthy and complex procedures, limited capacity at the state and local levels, and financial constraints. These barriers can discourage participation and limit the effectiveness of mitigation efforts. GAO also found that NFIP continues to pose a fiscal exposure to the federal government because premium rates do not fully reflect flood risk. Without improvements to mitigation efforts--particularly targeting repetitive loss properties--program costs are likely to increase for both policyholders and taxpayers.
GAO has made nine recommendations to FEMA and eight matters for congressional consideration to improve mitigation processes, address acquisition challenges, and reduce NFIP's fiscal exposure while maintaining affordability. As of March 2026, FEMA has implemented four of these recommendations.
This testimony highlights the importance of strengthening mitigation strategies and targeting high-risk properties to reduce long-term costs and improve the financial stability of the NFIP.