Remarks by Jo Ann Howard,
Federal Insurance Administrator
Burlington, Vermont
July 6, 2000

Thank you for that introduction. I enjoy speaking to a variety of audiences who share a common interest in the safety -- both physical and financial -- of their communities.

But I am especially honored -- personally honored -- to visit with state legislators. My husband, Ed Howard, was for many years a member of the Texas Legislature. I lost him to cancer not too long ago, but his example is very much with me today.

So I hope you’ll indulge me for just a moment while I tell you a story about him.

Not long after I was appointed to the Federal flood Insurance Administration, I had dinner with a group of congressional staffers. One of them, as it turned out, worked for Texas Senator Phil Gramm, who, as many of you know, is a Republican.

This young man approached me afterward. If there’s ever anything I can do, he told me, you just give me a call. And then he told me why.

Years before, he had been an intern in the Texas Legislature. He did the work many interns do: making copies, fetching coffee and running errands -- the kind of tasks nobody notices but without which the whole place would fall apart. Every day, he explained, he saw my husband.

And every day, my husband stopped to say hello -- not with a perfunctory nod of the head as he rushed through the hall, but by name, looking him right in the eyes, and when he asked this young man how he was doing, my husband really wanted to know.

You might wonder what that story could possibly have to do with insurance. Really, it’s pretty simple.

My husband taught me -- and so many others -- the lesson state legislators across America know -- that public service, in the end, is about people -- that's what’s really behind all the policies and programs and budgets and bills and votes and vetoes are families and faces.

It’s about the value of every person -- from an intern in the hallway to an individual in the home -- about giving everyone the tools to improve their own lives.

That’s the business we’re in at the National Flood Insurance Program. It’s more complicated than that, of course. In a few minutes, I’ll explain some of our work in more detail.

But I thought first, I’d just take a minute to tell you about our real business -- helping people, and keeping a promise.

The people are Americans who live along our creek beds and coastlines ... or cherish our beaches and bluffs ... or pay, with tax dollars they earn hard, the bills when the floodwaters come. We can’t hope to know each of them by name, or to say hello every morning. But we can commit ourselves -- and we do -- to give each one the same value my husband gave every person he met.

And the promise is simple. When a flood occurs, we will extend a helping hand. But long before the waters come, we will give people the resources -- and ask them to accept the responsibility -- to prepare. And wrapped within that promise, we believe there is a possibility -- the opportunity to wipe away fear, create prosperity, and enrich our environment.

Insurance is a central pillar of that promise, but it is also supported by two other responsibilities of the NFIP. The first is stewardship of the flood plain. We are committed to the idea that the best way to prevent flood damage is to take a total, holistic view of managing our flood plains. Instead of simply corralling water, our mission is renewing resources. Second, we are responsible for producing flood maps, which provide homeowners, contractors, engineers and policymakers with the most important tool in the insurance business: information.

NFIP represents our national commitment to those people, and this promise. But it is neither a federal mandate, nor solely a federal mission. Many of the most important decisions that determine public safety, public cost and the stewardship of public resources are made at the state and local level.

Disasters are not a federal problem alone. Many of them are not even federally declared. For these events, state and local jurisdictions bear the burden for removing debris, repairing infrastructure, providing services to the displaced and more. When disasters shut down businesses, they slow down revenues. Even in the worst, federally declared events, states must still provide a 25 percent match for federal funds.

So today, I thought I’d share a few ideas for what you, as state legislators and people involved in the legislative process, can do to promote solid flood-plain management, protect public safety and reduce disaster costs.

I’m no David Letterman. But here are the top 10 things state legislators can do to reduce flood risk:

1. Make sure people insure.
   
   Buying flood insurance is the most direct, effective and reliable way to ensure that natural disasters don’t become financial disasters too. Flood damage is not covered by homeowner’s or business insurance policies. We’re the only ones who provide it. The National Flood Insurance Program, or NFIP, is based on a bargain. We ask communities to enact and enforce floodplain -management rules that reduce flood losses. In exchange, we make federally backed flood insurance available in those communities.
   
   Today, we have more than 4.2 million policies in force in more than 19,000 communities. The total coverage is $524 billion, making the NFIP the single largest single line of insurance company in the world. In addition to providing insurance, NFIP also gives taxpayers an investment: we return bring in annual revenues of an annual profit to the Treasury of $1.3 billion and have paid for over $10 billion in losses since 1969.
   
   If you can get a single message to people at risk in your communities, make it this one: Don’t rely on disaster assistance to get you out of trouble. It’s only available for major presidentially declared disasters, not local flooding events. Even then, it’s quite limited -- and usually the assistance comes in the form of loans that must be repaid with interest.
   
   For information about flood insurance, property owners can contact their insurance agent or call the NFIP toll-free at 1-800-427-4661.
   
   Everyone at risk of flood damage should be insured. Which brings me to ...
   
   
2. Insure public buildings too.
   
   Public buildings are at risk for flood damage too, and that means every taxpayer is at risk as well. FEMA is exploring changes to the Public Assistance program with regard to insurance and has issued an advance notice of proposed a rule rulemaking under which uninsured public buildings would not be eligible for disaster assistance. We think it’s smart business, both for federal taxpayers and local ones. Just as important, we think it’s only fair. Communities that make room in their budgets for disaster insurance shouldn’t have to pay the bills for those that don’t.
   
   We also know insurance for public facilities can be difficult to obtain. We’re looking into a variety of solutions, possibly including creating a pool for public buildings.
   
   Now, anyone who has insurance will tell you the best way to reduce your rates is to reduce your risk. And that leads us to ...
   
3. Include strong flood standards in building codes and land-use decisions.
   
   The best time to deal with disasters isn’t when you’re already under water. It’s when you write the rules that tell people how and where they can build. Those rules should meet or exceed the minimum standards of the National Flood Insurance Program.
   
   Do that for a couple of reasons. First, your constituents won’t be able to purchase flood insurance unless you do. On a related note, communities that go the extra step of enacting especially strong rules can participate in our Community Rating System, which makes residents eligible for price breaks on insurance. Second, we know -- I can’t emphasize this enough, we flat-out know -- that strongly written and enforced building codes reduce disaster damage.
   
   Enforcement really is the key. Let me give you just one example. The devastation of Hurricane Andrew -- which tore through Miami and South Florida in 1992 -- wasn’t just caused by the ferocious speed of winds. The ferocious speed of development was to blame too. In the years leading up to Andrew, people were building so fast that building code enforcement became lax. And estimates now say that strict enforcement would have reduced losses in Hurricane Andrew by at least 30 percent.
   
   Most people think of building codes and land-use decisions as a local responsibility. But uniform statewide codes can have tremendous value as well. Uniform codes ensure that everyone involved in the building process -- from architects to engineers to contractors to homeowners -- is working off the same page.
   
   Keeping people out of the floodplain is an important part of mitigation. But it isn’t the only one. And what you think of as emergency management decisions aren’t the only issues you need to take into account. The real challenge isn’t dodging floods. It’s managing floodplains.
   
4. Play a proactive role in floodplain management.
   
   Decisions across a wide range of public policy and levels of government -- from housing to highways -- impact the floodplain. We believe, as I mentioned earlier, that the real solution to reducing flood damage lies in the holistic stewardship of the flood plain.
   
   And in addition to warding off danger, this approach also attracts opportunities. The decisions that protect the flood plain -- like preserving wetlands and open space -- also improve a community’s livability.
   
   States and communities share watersheds. Often, they have technical expertise to lend each other. That means the local, state and federal governments must work together. At FEMA and NFIP, we stand ready to be your partner.
   
   And speaking of working with people at the local level ...
   
5. Educate your agents.
   
   When it comes to getting our product to consumers, insurance agents are on the front lines. In order for them to do their jobs, they must have the latest information on flood risks and insurance coverage. How can you make sure they do? Include questions about flood insurance in licensing exams, and make flood insurance training a condition of maintaining an agent license. Provide continuing education credit for agents who attend an NFIP seminar.
   
   Agents aren’t the only critical link in the chain connecting the private and public sectors.
   
6. Help ensure lender compliance.
   
   Under the law, lenders must require flood insurance for federally guaranteed mortgages on properties with substantial flood risk. Even though the law was strengthened in 1994, between a quarter and a third of properties required to carry flood insurance still aren’t covered. And you can help, first by being aware of the issue yourself, and then by disseminating information on lender compliance to emergency management and banking authorities. And as you write your state’s laws to adapt to the fast-changing financial-services marketplace, keep lender compliance in mind.
   
   Federal requirements and resources like these can be an important part of your state’s strategy for reducing flood risk. But state law is also an indispensable resource. Increasingly, legislators are taking the initiative to address disaster risk at the state level. You can too. How? For starters ...
   
7. Order an assessment of your state’s disaster risks and they’re being addressed.
   
   The Texas Legislature last year appointed a blue-ribbon panel to study disaster risks and report back on how mitigation and disaster response could be improved. Every state agency involved in floodplain or emergency management is involved. So is the LBJ School of Public Affairs at the University of Texas. Here is their contribution. [Show LBJ Report] We served as a resource to the study.
   
   I encourage each of your states to follow suit. Ask yourselves: Do your State’s floodplain management authorities provide the level of protection that is needed? An occasional review of this sort is always a good idea, but it’s especially important in the case of disaster risk. This field stretches across so many different agencies that you may be surprised at how little coordination there is.
   
   And speaking of planning for disasters ...
   
8. Save for a "rainy day" -- literally.
   
   We all know the expression "saving for a rainy day," and in the case of flood risk, that’s exactly what you need to do. Many states reserve funds to cover the costs of specific disasters. But a growing number of states are creating comprehensive trust funds that finance ongoing planning and response. Funds like these can be used to finance mitigation, cover the state’s 25 percent match for federal disaster response assistance funds, and pay for disasters that require state resources but don’t rise to the level of a presidentially declared event.
   
   Up to now, I’ve talked about the federal role and state responsibilities. But in the end, disasters are a local event -- mitigation is a local investment -- and planning is most successful when it’s a community-based activity. So number 9 is ...
   
9. Encourage your communities to join Project Impact.
   
   Project Impact is FEMA’s nationwide initiative to make whole communities disaster-resistant. In nearly 200 communities across America, we’re ending the incentives to build in flood plains -- retrofitting buildings to withstand the next earthquake or hurricane -- and preserving the natural resources that can be our best protection against natural disasters.
   
   Project Impact is a partnership that engages every level of government and the private sector. More than 1,100 corporate partners across the nation are involved.
   
   These communities are safer. They rebound from disasters more quickly. But even more important, they’re discovering that disaster resistance also makes communities more vibrant, beautiful and economically secure. So I hope you’ll both encourage your communities to join and make your state a partner to them.
   
   I’ve unloaded a lot of advice in this Top 10 list so far. So let me guess what you might be thinking. Why doesn’t that lady quit the insurance racket and go into show business writing comedy for David Letterman?
   
   OK, maybe not. But you may have a more pertinent one: Where can I find more information about flood risk?
   
   Look no further than the number 10 step state legislators can take to protect their communities against floods:
   
10. Visit the NFIP web site.

You can find us online at www.floodalert.fema.gov. And that’s where you’ll find information about how flood insurance works, how to get it and steps communities can take to reduce their flood risk.

At NFIP, we seek your partnership in this program. But more than that, we need your help to keep a promise -- and to help our people.

It’s a promise that when the floodwaters come, we’ll be there to help -- and that long before they rage, we’ll help people prepare. Wrapped up in that promise is this possibility: by taking the measures that prevent flood risk, we can make our country more beautiful and our communities more livable.

We can transform life along America’s flood plains ... for the people who live along our coastlines and creek beds ... for those who cherish our beaches and bluffs ... and for the taxpayers who pay for flood damage with the money they earn.

I learned from my husband what state legislators across America already know -- that each of them has a name. All of them have dreams. And together, those are dreams we can help everyone to achieve. Thank you.