The nation's flood insurance program doesn't know the elevation of 750,000 high-risk homes with discounted policies, according to the National Research Council.

The omission could complicate efforts to phase out subsidized insurance rates in the National Flood Insurance Program, said researchers who contributed to a technical report that suggests the program needs to modernize the way it collects data and sets rates.

About 20 percent of the program's 5.5 million policies are priced too low to cover the risk of flooding. Many of those structures were built before the program was enacted in the late 1960s. So Congress grandfathered them into the program at reduced prices, believing that insurance premiums would offset rising federal disaster aid. Newer homes, meanwhile, would be built to stronger standards to prevent flooding damage.

Lawmakers also assumed that these low-lying older buildings wouldn't last long, because they're exposed to frequent flooding along rivers and near shorelines. But that hasn't happened.

"Something that surprised us was just how many of these structures there are," said David Ford, chairman of the NRC committee that prepared the report, which refers to the subsidized buildings as "negatively elevated structures."

"There may be as many as a million structures that fall within this category, which means that they're especially low-lying and at greater risk than structures, for example, that comply with the flood insurance program's sort of implicit land-use management criteria."

The Federal Emergency Management Agency, which oversees the flood program, knows the elevation of about 240,000 subsidized properties, or about a quarter of them. Elevation is important because the risk of flood damage is determined by a home's location relative to the 100-year storm height. A house 1 foot below that level could be damaged less than one 10 feet below it.

Elevation is also supposed to be used to calculate the price of insurance. The lower a home is, generally, the more its owner pays. Without an "elevation certificate," FEMA can't accurately calculate how much a policy should cost because it doesn't know the true risks to that home, researchers said.

That could be a problem as FEMA begins raising rates on subsidized homes, as required by Congress in the Homeowner Flood Insurance Affordability Act of 2014.

"It's a big challenge," said Ford, an engineering consultant in Sacramento, Calif. "They're working hard to be fair and unbiased in how they do that. For many of us, that would be almost an overwhelming task put in front of us. A million structures."

Duration of flooding not considered
Homeowners are responsible for determining the elevation of their house, a practice that involves hiring an engineer. It can cost hundreds of dollars, according to the report. Without that data, FEMA can't accurately set rates, or it may face criticism from the public for establishing prices that many people are bound to believe are too high.

The report suggests that FEMA, or towns, could determine the elevations of many homes at once using truck-mounted LIDAR, a technology that measures distance by analyzing the reflected light of a laser. That could be cheaper than hiring engineers for each house, the report says.

"In the short term, FEMA's going to have to do something to get an estimate of those [elevations]," said Ross Corotis, a committee member and a professor of engineering at the University of Colorado, Boulder.

The report doesn't make recommendations, but it does offer conclusions about the state of the program, which is about $24 billion in debt following Hurricane Katrina and Superstorm Sandy. FEMA officials requested the study.

One finding describes aging technological aspects of the program. When it was being devised, officials identified 30 different topographical categories that could be used to help establish the price that homeowners would pay, Corotis said. Those who live in a deep mountain valley, for example, might pay more than someone in a flat field.

In the end, officials used just one topographical designation. That means people facing different depths of flooding were grouped together when ascertaining prices, even though they face different exposures to damage. The result is that some people pay too little, while others pay too much. In the insurance world, this is called a cross subsidy.

The program also does not take the duration of a flood into account, just the depth of inundation. The length of time that a home is waterlogged can lead to mold, more damage and other losses, the researchers said.

It also doesn't consider incremental protections offered by levees, or partial levees. The program deems that a certified levee will protect homes behind it from a 100-year storm. But sometimes they fail, and that risk could be considered.

On the other hand, the program doesn't account for noncertified levees at all. But it might perform some protective role during frequent, smaller storms.

All of that could be considered in a "comprehensive risk analysis," the report said. That could provide more accurate rates while fulfilling another function of the program: communicate to the public the real risks it faces, so it can prepare for them.

"People need to make decisions being aware of that risk," Corotis said. "If the granularity isn't there, it's not a very effective tool to help them do that."

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC., 202-628-6500