The private insurance companies have gotten out of the flood insurance game long ago, leaving the government-backed US flood insurance program as the only game in town. And it's got a lot of bad incentives.

A quick summary is in https://www.apnews.com/d6a3852a6dd34a8c90a5a1acc0d0afaf, but that's just scratching the surface.

A few weeks ago a 60 minutes segment compared flooding in The Netherlands vs the USA.

In The Netherlands if an area floods homes are not built there and measures are taken to control the water in those areas. In the US people get insurance and build in the same place using the same style.

New Jersey hired a man from The Netherlands to tell them how to break out of that process. This was due to the Sandy Hurricane that devastated the coast.

It boils down to if something keeps getting damaged stop doing the same thing over and over expecting different results.

edit: https://www.cbsnews.com/video/storm-water-management-dutch-s...

Building codes have changed dramatically for hurricane prone and flood prone properties in the US. Homes are built on stilts/pillars and with roofs designed to withstand Cat5 winds. It’s night and day to how they were built even 20-30 years ago.

One of the largest insurers in Florida is Citizens Property Insurance. It's run by the state.

On top of that, Florida has a state-run fund (Florida Hurricane Catastrophe Fund) for times when the private/commercial reinsurance market is insufficient.

I briefly worked in the insurance industry in Canada. FWIW in my experience the industry is incredibly backwards. I wouldn't expect their prices to reflect anything meaningful about climate risk. Quite the opposite. I rather think that the industry is jumping on the climate change band wagon precisely because their analytics are so poor. (Don't get me wrong, climate change is happening. I just think industries are going to profit from it any way that they can. In this case, this is a cover-your-ass move because the industry hasn't invested in this analytical research. Labeling bad policies that should never have been written at a certain price as climate change is a convenient excuse.)

This is anecdotal, but the one I worked at had no weather/climate modelling and was only just beginning to leverage even the most basic analytics across the company. From what I heard from people in pricing was that their pricing was also a mess for property. They basically just gave up on selling insurance to anyone within 100 meters of water. They did account for elevation to some degree so that they wouldn't insure people in a flood plain, but much of the process was kludgy and ad hoc. The company is a reasonably big player and is (laughably) considered to be very technically advanced in the broader market. Even the biggest players are just moving out of manual data entry so I am not overly hopeful about the broader industry in this country.

On the other hand, Canada has a very sheltered insurance market and it desperately needs more competition. It's very protected though so I don't expect that to happen any time soon. If there was more competition, I would expect the analytics to be better and yield a more accurate picture of the real climate change costs based on the existing science.

A few years go, I heard that Florida was updating its flood maps from the 1970s. Having a number of family members living in Florida I checked out the updated maps only to find that they had only made relatively minor adjustments to the property elevation, but no adjustment to the flooding scenarios. The end result was that one property might be added to a flood zone but a neighboring property might have been removed from the flood zone. There was no accounting for climate change or even normal sea level rise in the 40+ years since the previous version of the maps.

While doing a gig for Nationwide years ago I got to see how difficult insurance is for coastal areas. Flood insurance has paid out way more claims than money they had in the tank long ago. Alternative capital investors rushed into this market the last few years causing enough competition that rates barely moved but now these rates are being adjusted on a risk basis which means things are about to get a whole lot more expensive. It’s simply a delay in the movement of the market but the damage has been done and there is no turning back now. So yes, you are correct.

From what I recall, high risk events are typically separated from policies and require the home owner to carry 'normal' insurance and they can optionally have the high-risk event policy.

You can buy a separate wind damage rider on your homeowners but if you want flood coverage it's a government run game.

As memorably recalled by U. Ruckus in the Boondocks episode “Invasion of the Katrinians”

They peaced out long ago on something they could be useful on and you actually have to buy flood insurance separately I believe. That’s how it was when I bought my last house.

Insurance policies aren't typically bought 100 years into the future. Often, rates change from year to year.

Also, a 100-year flood is a misnomer. It is a flood that has a 1% chance of happening in the current year. It does not attempt to assess what the probability of a flood will be in 50 or 100 years.