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History of Flood Mitigation and Insurance Laws

Federal flood insurance was proposed as early as the mid-to-late 1930's, after private insurers ceased offering flood coverage around 1927. But it wasn't until the National Flood Insurance Act of 1968 was signed into law that federal flood insurance became a reality in the form of the National Flood Insurance Program (NFIP).

Early Federal flood legislation focused on prevention and mitigation of flood damage rather than a means for providing financing for or "insuring" the exposure. This history of flood legislation is highlighted in the following paragraphs.

Flood Control Act of 1917

Direct Federal involvement in flood control began with this act. The Flood Control Act of 1917 focused mostly on navigational improvements and authorized several specific flood control projects, mostly along the Mississippi River. The United States Department of Agriculture (USDA) created researched-based studies for rainfall and runoff measurements developing for the first time a rational method for computing maximum runoff capacity.

Lower Mississippi Flood Control Act of 1928

This act was the result of the April 1927 flood of the lower Mississippi River. In that flood:

200 levees were breached;
18 million acres of land in six states were inundated by flood waters;
313 lives were lost; and
Property damage reached $284 million ($3.3 billion today).

Responsibility for flood protection moved from local authorities to the Federal Government. But the law ONLY applied to the areas adjacent to the Lower Mississippi River and dealt strictly with issues of structural protection (dams, levees, etc.).

Flood Control Act of 1936

Ironically in 1935, in the middle of the worst and longest-lasting drought in American history, four states (Colorado, Nebraska, New York and Texas) suffered major flood damage leading to the Flood Control Act of 1936. Concerned only with the construction of flood control structures, this act required local jurisdictions (cities, towns, counties and states) to GIVE ("free") land to the Federal Government for the development of easements and right-of-ways. Not only were they required to "donate" the land, once the work was complete the local jurisdiction was forced to assume responsibility for the operation and maintenance of the structures.

Flood Control Act of 1938

This act repealed the forced contribution of land placed on local jurisdictions by the 1936 act. The Federal Government undertook construction of flood-control dams and reservoirs at its own expense

Flood Control Act of 1944

Authorized the construction of thousands of dams across the United States.

President Truman's Flood Insurance Bill of 1952

Billions had already been invested by the Federal government in the development and maintenance of flood control projects, and additional billions in Federal dollars had been spent in disaster recovery payouts following major flooding incidents. Additional major flooding in 1951 prompted President Truman to ask congress to appropriate $50 million to establish a Federal flood insurance program. Congress did not pass the bill.

Watershed Protection and Flood Prevention Act of 1954

This act authorized flood-protection structures in upstream watersheds, and authorized the U.S. Department of Agriculture's Soil Conservation Service (now the Natural Resources Conservation Service) to participate in comprehensive watershed management projects in cooperation with states and their subdivisions.

Flood Insurance Act of 1956

Congress passed the Flood Insurance Act of 1956, which was signed into law by President Eisenhower in August 1956. However, the program never received funding because the true costs could not be established. Insurance carriers opposed the program as being "impractical." The program was to provide up to $10,000 in insurance per dwelling and to encourage private companies to provide coverage for risks above that amount. The premium was to be the same for all policyholders, regardless of location.

Southeast Hurricane Disaster Relief Act of 1965

Nine hurricanes and major storms hit the Atlantic and Gulf coasts between 1954 and 1965. These storms took over 1,100 lives and caused several billions of dollars in property damage. The Department of Housing and Urban Development (HUD) was directed to study the feasibility of a national flood insurance program as an alternative to continued and ever-increasing disaster relief payments. HUD was only allowed nine months to compile the study.

The Task Force on Federal Flood Control Policy - Gilbert White, chairman

Conducted as a parallel study with HUD, the findings of this task force were published in August 1966 and became known as House Document 465.

Major shortcomings of the existing federal policy of flood control and disaster relief were identified. The study concluded and recommended that a move should be made toward a national flood insurance program, but it contained a warning: "A flood insurance program is a tool that should be used expertly or not at all. Correctly applied, it could promote wise use of flood plains. Incorrectly applied, it could exacerbate the whole problem of flood losses. For the Federal Government to subsidize low premium disaster insurance or provide insurance in which premiums are not proportionate to risk would be to invite economic waste of great magnitude."

It appears White's warning was not heeded. The government is continually reviewing rate adequacy, premium subsidies and flood plain issues. As of mid-2021, the NFIP owed nearly $21 billion to the Federal reserve according to the Congressional Research Service.

Following all the flood control acts and early recommendation and attempts at establishing a Federal flood insurance program, the Federal Government finally acted upon nearly 50 years of experience to establish Federal flood insurance in 1968, which has legislatively evolved into our modern program – for good or for bad.

First published: August 11, 2021