A power line pole lies splintered in the middle of a road in front of a house in Lake Stevens, Wash., after a November 2024 “bomb cyclone” storm that caused widespread damage in the state. The Federal Emergency Management Agency has denied Washington’s request for a disaster declaration that would allow the state to seek federal recovery funds. (Mathieu Lewis-Rolland/Getty Images)

ISSAQUAH, Wash. — In the wake of recent natural disasters, state leaders across the country are finding that emergency support from the federal government is no longer a given.

Under President Donald Trump, the Federal Emergency Management Agency has denied federal assistance for tornadoes in Arkansas, flooding in West Virginia and a windstorm in Washington state. It also has refused North Carolina’s request for extended relief funding in the aftermath of Hurricane Helene.

While it’s not uncommon for the feds to turn down some requests for disaster declarations, which unlock federal aid, state leaders say the Trump administration’s denials have taken them by surprise. White House officials are signaling a new approach to federal emergency response, even as Trump and Homeland Security Secretary Kristi Noem threaten to shut down FEMA altogether.

“The Federal Government focuses its support on truly catastrophic disasters—massive hurricanes, devastating earthquakes, or wide-scale attacks on the homeland,” Brian Hughes, a spokesman for the National Security Council, which advises the president on issues of national security, said in a statement to Stateline.

Hughes said state and local governments “often remain an impediment to their own community’s resilience.” He called on states to take on a more extensive role.

“States must have adequate emergency management staff, adoption and enforcement of modern building codes, responsible planning and strategic investment to reduce future risk, commonsense policies that prioritize preparedness over politics, disaster reserve funds to handle what should be routine emergencies, pre-negotiated mutual aid and contingency contracts that speed up recovery, and above all, an appetite to own the problem,” the statement said.

State emergency management leaders say the federal retreat from disaster response has upended a long-established system.

“This is very unusual,” said Karina Shagren, communications director with the Washington Military Department, which oversees the state’s emergency management division. “This is the first time in recent memory that we have hit all the indicators to get FEMA’s public assistance program and we’ve been denied.”

Michael Coen, who served as chief of staff at FEMA during the Obama and Biden administrations, said the president has “broad discretion” to approve or deny disaster requests, regardless of whether they meet specified conditions. If Trump intends to curtail federal support, Coen said, he should give states clear guidelines.

“They should have a dialogue with the states, so the states aren’t spinning their wheels making requests that are going to get denied,” Coen said.

He added that states need guidance if they’re expected to build emergency management programs to take on what the feds once handled. Not all states, Coen said, have the capacity to replicate those functions. And disasters are expected to increase in frequency and severity because of climate change.

“Having that capability in every single state instead of having one FEMA is not the best use of tax dollars to prepare for the worst day,” he said.

Historically, FEMA has coordinated the federal response during emergency situations. In the National Security Council statement, Hughes said Trump has promptly authorized “life-saving emergency support to states during and in the immediate aftermath of disasters.”

But the agency’s larger role has focused on recovery after disasters, assessing damage and distributing funding to help communities rebuild. Now, some communities are finding that support is no longer a sure thing.

Issaquah, Washington, was among the cities hit hard by the “bomb cyclone” that ripped through the state last November. Severe winds killed two people in the state, knocked out power for hundreds of thousands of residents and caused millions in damage, state officials said.

A city of about 40,000 residents in the Cascade foothills, Issaquah’s costs from the storm totaled $3.8 million — covering road repairs, removal of 800 tons of tree debris and overtime pay for first responders. Mayor Mary Lou Pauly said the city has seen four events since 2020 that qualified for federal disaster aid, with no previous denials. If Washington is unable to win its appeal with FEMA, she said, Issaquah will take a financial hit to its reserves, leaving it more vulnerable to future storms.

“We put a lot of investment in being resilient,” Pauly said. “When you get to a number like $3.8 million, that is too big of a number for us to be able to rebuild without assistance. Our residents pay federal taxes, and this is what they think they pay them for, this is what they expect their national government to do. They do not want me to set property taxes 100% higher.”

Pauly echoed Coen’s view that FEMA should give states a clear outline of the role it will play.

“What we all want to know is what are the rules of the game?” she said. “If the criteria has changed, then why aren’t we getting told about it?”

Washington state leaders said they were shocked when FEMA denied their request for $34 million to help repair roads, utilities and power systems. Democratic Gov. Bob Ferguson said the state’s application met all of the “very clear criteria to qualify.” He has vowed to appeal the decision.

“We were really relying on that funding,” said Shagren, of the Washington Military Department. “If the appeal is denied, our local jurisdictions will have to prioritize which projects they can move forward with and which they don’t. They’re going to be impacted greatly. This wasn’t some small storm.”

Other states also have been surprised by FEMA denials. Arkansas suffered 14 tornadoes last month, triggering a request for a disaster declaration from Republican Gov. Sarah Huckabee Sanders. But the feds told state leaders to handle it on their own.

“[I]t has been determined that the damage from this event was not of such severity and magnitude as to be beyond the capabilities of the state, affected local governments, and voluntary agencies,” the federal government’s denial read, according to Arkansas Times.

Sanders has appealed that decision, saying the disaster caused “widespread destruction” that requires federal help.

In West Virginia, state leaders asked for disaster aid to cover 14 counties that were struck by flooding in February. But FEMA denied individual assistance to seven of those counties. Republican Gov. Patrick Morrisey said in a statement that he is looking at options to appeal, but praised the Trump administration for its “strong support” following the floods.

Democratic leaders in the state have called on Morrisey to demand more help from the feds, WOWK reported.

Meanwhile, FEMA has said it will no longer match 100% of North Carolina’s spending to recover from September’s Hurricane Helene. Democratic Gov. Josh Stein said the cost share was crucial to the state’s efforts to rebuild.

“The need in western North Carolina remains immense — people need debris removed, homes rebuilt, and roads restored,” Stein said in a statement this month, according to NC Newsline. “I am extremely disappointed and urge the President to reconsider FEMA’s bad decision, even for 90 days.”

Stateline reporter Alex Brown can be reached at abrown@stateline.org.

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

In less than 10 years, three catastrophic floods ravaged northwestern Wisconsin and changed the way people think about water. 

The most severe, in July 2016, slammed Ashland with up to 10 inches of rain in less than a day — a month’s worth of rain fell in just two hours. As rivers swelled to record highs, major highways broke into pieces, and culverts washed away. It took months for roads to reopen, with more than $41 million in damage across seven counties. 

The Marengo River, which winds through forests and farmland before meeting the Bad River that flows into Lake Superior, was hit hard during these historic deluges. Centuries earlier, the upper watershed would have held onto that water, but logging and agriculture left the river disconnected from its floodplain, giving the water nowhere safe to go. 

Today, the Marengo River stands as an example of a new kind of solution. Following the record floods, state leaders invested in opening up floodplains and restoring wetlands to relieve flooding. As the need to adapt to disasters grows more urgent, the Marengo River serves as an example that there’s a cheaper way to do so: using wetlands. 

“We can’t change the weather or the patterns … but we can better prepare ourselves,” said MaryJo Gingras, Ashland County’s conservationist. 

Wetlands once provided more natural flood storage across Wisconsin and the Mississippi River Basin, soaking up water like sponges so it couldn’t rush further downstream. But about half of the country’s wetlands have been drained and filled for agriculture and development, and they continue to be destroyed, even as climate change intensifies floods.

As the federal government disposes of rules to protect wetlands, environmental advocates want to rewrite the ecosystem’s narrative to convince more people that restoration is worth it. 

Wetlands aren’t just pretty places, advocates argue, but also powerhouses that can save communities money by blunting the impact of flood disasters. A 2024 Wisconsin law geared at preventing such disasters before they happen, inspired by the wetland work in the Marengo River watershed, is going to test that theory. 

“Traditionally, the outreach has been, ‘We want to have wetlands out here because they’re good for ducks, frogs and pretty flowers,’” said Tracy Hames, executive director of the Wisconsin Wetlands Association. “What do people care about here? They care about their roads, their bridges, their culverts … how can wetlands help that?” 

Bipartisan Wisconsin bill posed wetlands as flood solution

Northern Wisconsin isn’t the only place paying the price for floods. Between 1980 and 2025, the U.S. was struck by 45 billion-dollar flood disasters, according to the National Oceanic and Atmospheric Administration, with a cumulative price tag of nearly $206 billion. Many parts of the vast Mississippi River Basin receive up to eight inches more rain annually than they did 50 years ago, according to a 2022 analysis from Climate Central, a nonprofit organization that analyzes climate science. 

Damaging floods are now so common in the states that border the Mississippi River, including Wisconsin, that the issue can’t be ignored, said Haley Gentry, assistant director of the Tulane Institute on Water Resources Law and Policy in New Orleans. 

“Even if you don’t agree with certain (regulations) … we absolutely have to find ways to reduce damage,” Gentry said.

Former Wisconsin state Rep. Loren Oldenburg, a Republican who served a flood-prone district in southwest Wisconsin until he lost the seat last year, was interested in how wetlands could help.

Oldenburg joined forces with Republican state Sen. Romaine Quinn, who represents northern Wisconsin and knew of the work in the Marengo River watershed. The lawmakers proposed a grant program for flood-stricken communities to better understand why and where they flood and restore wetlands in areas that need the help most. 

Jennifer Western Hauser, policy liaison at the Wisconsin Wetlands Association, met with Democratic and Republican lawmakers to advocate for the bill. She emphasized problems that might get their attention — related to transportation, emergency services, insurance, or conservation — that wetland restoration could solve. She said she got a lot of head nods as she explained that the cost of continually fixing a washed-out culvert could vanish from storing and slowing floodwaters upstream. 

“These are issues that hit all over,” she said. “It’s a relatable problem.”   

The bill passed unanimously and was signed into law by Democratic Gov. Tony Evers in April 2024. Evers and the Republican-controlled Legislature approved $2 million for the program in the state’s most recent budget. 

Twenty-three communities applied for the first round of grant funding, which offered two types of grants — one to help assess flood risk and another grant to help build new wetlands to reduce that risk. Eleven communities were funded, touching most corners of the state, according to Wisconsin Emergency Management, which administered the grants. 

Brian Vigue, freshwater policy director for Audubon Great Lakes, said the program shows Wisconsin residents have come a long way in how they think about wetlands since 2018, when the state government made it easier for developers to build in them. 

There’s an assumption that wetland restoration comes only at the expense of historically lucrative land uses like agriculture or industry, making it hard to gain ground, Vigue said. But when skeptics understand the possible economic benefits, it can change things. 

“When you actually find something with the return on investment and can prove that it’s providing these benefits … we were surprised at how readily people that you’d assume wouldn’t embrace a really good, proactive wetland conservation policy did,” he said. 

Private landowners need to see results

About three-quarters of the remaining wetlands in the lower 48 states are on privately owned land, including areas that were targeted for restoration in the Marengo River watershed. That means before any restoration work begins, landowners must be convinced that the work will help, not hurt them. 

For projects like this to work, landowner goals are a priority, said Kyle Magyera, local government outreach specialist at the Wisconsin Wetlands Association, because “they know their property better than anyone else.”

Farmers, for example, can be leery that beefing up wetlands will take land out of production and hurt their bottom line, Magyera said. 

In the Marengo watershed, Gingras worked with one landowner who had farmland that wasn’t being used. They created five new wetlands across 10 acres that have already decreased sediment and phosphorus runoff from entering the river. And while there hasn’t been a flood event yet, Gingras expects the water flows to be slowed substantially.

This work goes beyond restoring wetland habitat, Magyera said, it’s about reconnecting waterways. In another project, Magyera worked on a private property where floods carved a new channel in a ravine that funneled the water faster downstream. The property now has log structures that mimic beaver dams to help slow water down and reconnect these systems. 

Now that the first round of funding has been disbursed in Wisconsin’s grant program, grantees across the state are starting work on their own versions of natural flood control, like that used in Marengo. 

In Emilie Park, along the flood-prone East River in Green Bay, a project funded by the program will create 11 acres of new wetlands. That habitat will help store water and serve as an eco-park where community members can stroll through the wetland on boardwalks.

In rural Dane County, about 20 miles from the state capital, a stretch of Black Earth Creek will be reconnected to its floodplain, restoring five and a half acres of wetlands and giving the creek more room to spread out and reduce flood risk. The creek jumped its banks during a near record-breaking 2018 rainstorm, washing out two bridges and causing millions of dollars in damage. 

Voluntary program with economic angle could be of interest elsewhere 

Nature-based solutions to flooding have been gaining popularity along the Mississippi River. Wisconsin’s program could serve as a “national model” for how to use wetlands to promote natural flood resilience, Quinn wrote in a 2023 newspaper editorial supporting the bill.

Kyle Rorah, regional director of public policy for the Great Lakes/Atlantic region of Ducks Unlimited, said he’s talking about the Wisconsin grant program to lawmakers in other states in the upper Midwest, and he sees more appetite for this model than relying on the federal government to protect wetlands.  

And Vigue has found that stakeholders in industries like fishing, shipping and recreation are receptive to using wetlands as infrastructure. 

But Gentry cautioned that voluntary restoration can only go so far because it “still allows status quo development and other related patterns to continue.”

Still, as the federal government backs off of regulation, Gentry said she expects more emphasis on the economic value of wetlands to drive protection. 

Some of that is already happening. A 2024 analysis from the Union of Concerned Scientists found that wetlands save Wisconsin and the upper Midwest nearly $23 billion a year that otherwise would be spent combating flooding. 

“Every level of government is looking at ways to reduce costs so it doesn’t increase taxes for their constituents,” Gingras said. 

John Sabo, director of the ByWater Institute at Tulane University, said as wetlands prove their economic value in reducing flood damage costs, taxpayers will see their value. 

“You have to think about (wetlands) as providing services for people,” Sabo said, “if you want to get people on the other side of the aisle behind the idea (of restoring them).” 

And although the Wisconsin grant program is small-scale for now, he said if other states bordering the Mississippi River follow its lead, it could reduce flooding across the region.

“If all upstream states start to build upstream wetlands,” he said, “that has downstream impacts.” 

This story is part of the series Down the Drain from the Mississippi River Basin Ag & Water Desk, an independent reporting collaborative based at the University of Missouri in partnership with Report for America, with major funding from the Walton Family Foundation.

Wisconsin Watch is a member of the Ag & Water Desk network. Sign up for our newsletters to get our news straight to your inbox.

Framing wetlands as a flooding solution won bipartisan support in Wisconsin. Could it work elsewhere? is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Flood control along the Mississippi River is a central piece of a newly passed federal law — work that advocates believe is critical as the river basin sees more frequent and severe extreme weather events due to climate change. 

The Water Resources Development Act (WRDA) is passed by Congress every two years. It gives authority to the U.S. Army Corps of Engineers to undertake projects and studies to improve the nation’s water resources. 

Signed into law Jan. 4, this year’s package includes studies on increased flooding in the upper basin, flood mitigation measures throughout the river system, ecological restoration, and a $6 billion floodwall in Louisiana. 

The Mississippi River is managed in large part by the Army Corps, so it often features prominently in the bill, with a dual aim of making the river more suitable for shipping and restoring environmental degradation from flooding, nutrient pollution and climate change. 

Kirsten Wallace, executive director of the Upper Mississippi River Basin Association, called this year’s WRDA “a pretty special one.” She said it contained wins for many of the diverse stakeholders along the river, including shippers, environmental advocates, riverfront communities and federal and state agencies — who don’t always agree. 

Advocates lauded the law’s emphasis on nature-based solutions. In a press release, Stephanie Bailenson, policy team lead for The Nature Conservancy, said, “Since 2016, Congress has directed the corps to consider natural and nature-based solutions alongside or instead of traditional infrastructure. This latest act continues that trend.”

But all of these projects are only promised because funding doesn’t come until later, when Congress appropriates it. Many projects authorized in previous versions of the law are still unfunded, according to the Congressional Research Service.

Here’s what will affect the river in the Water Resources Development Act of 2024: 

Study of flood risk on the upper Mississippi River

The law authorizes a large-scale study of flooding on the Upper Mississippi River System, which includes the Mississippi River from its headwaters to where it meets the Ohio River at Cairo, Illinois, as well as the Illinois River and portions of some smaller tributaries.

The upper river has seen two major floods in the last few years: one in 2022 and one in 2019, which lasted for months and caused billions of dollars in damage. 

The study’s chief goal: figuring out how to reduce flood risk across the entire river system, instead of relying on municipalities to try to solve flooding problems themselves, which can sometimes have impacts downstream. North of St. Louis, for example, levees constrain the river to protect communities and valuable farmland from flooding — and some levee districts have raised those levees higher, safeguarding themselves but effectively pushing floodwaters faster downstream. 

“This plan allows more of a comprehensive way for levee districts to improve what they currently have … in a way that doesn’t put them in a position to be adversarial or just impose risk somewhere else,” Wallace said. 

She said the study will be a challenge, but that levee districts are eager for solutions as flood risks and heavier rainfall increase. 

Once the study receives funding, it will be led by the Army Corps’ St. Louis District, Wallace said. It’ll solicit input from cities, towns and ports along the river, recreators, the shipping industry and federal environmental agencies like the U.S. Fish and Wildlife Service and the U.S. Geological Survey. 

Flood projects for cities from the headwaters to the delta 

Cities and towns along the river could get help for the localized effects of flooding too, thanks to several projects authorized by the law. Upstream, that includes La Crosse, Wisconsin, which will enter into an agreement with the Army Corps to study the role of the city’s levees, which were constructed around the river’s record flood in 1965. 

“We have to have an eye on maintaining what we’ve got and looking toward the future and whatever conditions the river might undergo to be prepared as best we can,” said Matthew Gallager, the city’s director of engineering and public works. “Because obviously, nature is going to win.” 

Downriver, Louisiana secured the largest project authorization within the law. To protect communities in St. Tammany Parish, a county north of Lake Pontchartrain, Louisiana, plans to build a $5.9 billion levee and floodwall system totaling 18.5 miles in length to protect over 26,000 structures, most of which are family homes. 

The St. Tammany Flood Risk Management Project is slated to receive $3.7 billion in federal funding. The other 35% will come from non-federal sponsors, such as the Louisiana Coastal Protection and Restoration Authority (CPRA). 

“By authorizing the St. Tammany project for construction, Congress recognizes again the national importance of Louisiana and that CPRA can work with the federal government to execute a multi-billion coastal protection project successfully,” said CPRA Chairman Gordy Dove.

The law also authorizes a federal study of the Lake Pontchartrain Storm Surge Reduction Project, a component of Louisiana’s Coastal Master Plan meant to protect nine parishes bordering the lake. The Army Corps will investigate whether the proposed project to reduce flood risk is in the federal interest. 

Other approved flood control projects will be funded along the lower Mississippi River and its tributaries, including the Ouachita River in Louisiana. Several counties in Mississippi will also receive funding to improve environmental infrastructure, such as water and wastewater systems. 

Near Memphis, the bill authorizes the Hatchie-Loosahatchie Ecosystem Restoration project, which covers a 39-mile stretch of the lower Mississippi River. The project aims to manage flood risks while also restoring and sustaining the health, productivity and biological diversity of the flyway. 

In New Orleans, a study was authorized to investigate ecosystem restoration and water supply issues, such as the mitigation of future saltwater wedges that threaten drinking water and wetlands at the very end of the Mississippi River. 

More support for the Upper Mississippi River Restoration program 

The law also increases the amount of money Congress can give to the Upper Mississippi River Restoration program, which funds habitat restoration activities and scientific research on the upper river. 

Congress increased the money it can direct to the research part of the program by $10 million, bringing the total the program can get to $100 million annually. 

The funding boost “really is a recognition of the value of the science … the understanding that has improved about how the system is functioning over the last three decades,” said Marshall Plumley, the Army Corps’ regional manager for the program. 

If given extra funding, Plumley said program staff want to use it to better understand the effects of the increased amount of water that has flowed through the river in recent years. That increase, partly attributed to wetter conditions due to climate change, is changing the river’s floodplain habitats, including forests and backwater areas. 

A change to how new water infrastructure gets funded

The Mississippi River functions as a water superhighway, transporting around $500 million tons of goods each year. Infrastructure to keep shipping running smoothly is costly, and one adjustment in WRDA 2024 is aimed at shifting the burden of those costs. 

Taxpayers have been funding inland waterway infrastructure for nearly two centuries, but in 1978 Congress established the Inland Waterways Trust Fund, which requires the private shipping industry to pitch in. 

Today, the trust fund’s coffers are filled by a 29-cent per gallon diesel tax on commercial operators that use the Mississippi River and other inland waterways, adding up to about $125 million per year in recent years. New construction — like wider, more modern locks and dams on the upper river — is paid for through a public-private partnership: the private dollars in the fund, and federal dollars allocated by Congress. 

Until recently, the private dollars covered 35% of new construction costs, and federal dollars covered 65%. The new WRDA adjusts that to 25% and 75%, respectively. 

Advocates for the shipping industry have long believed taxpayers should have a bigger hand in funding construction because it’s not just shippers who benefit from an efficient river. 

The balance in the trust fund “always limits” construction that can happen in a given year, said Jen Armstrong, director of government relations for the Waterways Council. 

“We can’t afford to have projects take three decades or two decades to complete,” Armstrong said, “because we have other locks that are deteriorating.” 

Armstrong said she believes shifting more of the cost to the federal government will accelerate those projects. 

Not everyone supports the cost share change, however, including American Rivers, which has opposed the creation of new locks on the upper Mississippi in favor of helping the river revert to more natural processes. 

Kelsey Cruickshank, the group’s director of policy and government relations, called it “a disappointing development that continues to give short shrift to the incredible ecosystem of the world’s third-largest freshwater river system.”

This story is a product of the Mississippi River Basin Ag & Water Desk, an editorially independent reporting network based at the University of Missouri School of Journalism in partnership with Report For America and funded by the Walton Family Foundation. Wisconsin Watch is a member of the network. Sign up for our newsletter to get our news straight to your inbox.

New federal law addresses climate extremes and flooding along Mississippi River is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Early on Election Day, highways in the St. Louis area were inundated with water. Over several days, intense storms battered Missouri, bringing six to 10 inches of rain — record-breaking amounts for November.

The flash flooding killed at least five people, including two older poll workers whose vehicle was swept from a state highway.

Mayors along the Mississippi River have watched for years as intensifying rain storms and flooding wreak havoc on their communities.

Take Grafton, Illinois, which escaped Election Day flash flooding but suffered $160,000 to $170,000 in damages from a heavy rain event in July. The town’s main intersection was blocked with logs and debris, and the storm blew out a water line and left streets in need of repair.

But Grafton never received a federal disaster declaration and was not eligible for assistance from the Federal Emergency Management Agency (FEMA). Instead, it paid for road and water line repairs through its Department of Public Works’ annual budget. As a result, the city could no longer purchase new trucks for snow plowing this year, as it had planned.

“What it means is that we’ll limp through another year, keep the vehicles running,” said Grafton Mayor Michael Morrow, who oversees the $1.2 million annual budget for the small riverfront city of about 600.

River communities have suffered repeated losses. But federal disaster funding can take weeks, months or even years to pay out. Traditional insurance programs are tied to property and require proof of loss for a payout, which can be burdensome and lengthy to assemble. 

So this fall, the Mississippi River Cities and Towns Initiative (MRCTI) announced a new insurance pilot, with hopes of better helping river towns recover. 

MRCTI, which represents 105 cities in 10 states in the Mississippi River Basin, including Wisconsin, is working with Munich Re, a German multinational insurance company, to create the insurance product. 

The resulting pilot will test a novel type of insurance pool — called parametric insurance — that is designed to rapidly fund emergency response after natural disasters such as flooding. 

Pilot will test usefulness of new ‘parametric’ insurance policies

The likely cause of intensifying rainfall and floods is human-caused climate change, according to the Fifth National Climate Assessment, a scientific report created every four years for the United States Congress and the president, to help explain the impacts, risks and vulnerabilities associated with a changing global climate.

In 2019, communities in the Basin saw months of flooding, spanning across the Mississippi, Missouri and Arkansas rivers. Reported losses totaled almost $25 billion across at least 17 states, according to the National Oceanic and Atmospheric Administration.

The central U.S. is emerging as a new flash flooding hotspot, according to research published in Nature’s Communications Earth & Environment journal. With its new role as a hotspot comes more disaster damage – and need for insurance that addresses that.

While conventional indemnity insurance requires insured owners to prove specific losses by amassing evidence and presenting pre-storm documentation, parametric insurance pays out quickly after agreed-upon “triggers” – such as wind speeds or river heights – reach a certain level. 

For the MRCTI pilot, Munich Re has suggested using watershed data from the U.S. Geological Survey to determine the best gauges along the river to measure flood depth. Once the river flooding reaches a certain depth, the payout would be triggered. 

Getting that trigger right is key, said Kathy Baughman McLeod, chief executive officer of Climate Resilience for All, a nonprofit focused on climate adaptation.

“You want to have sufficient understanding of how you set the triggers at a certain place and why,” she said. “There’s a lot of engagement necessary to get everybody on the same page about what the product is, how it works, what the trigger should be.”

The goal of Munich Re’s pilot program is to demonstrate in real time how a parametric insurance payout policy would function in current insurance market conditions and how swift payouts could better assist a city’s disaster response in the immediate days following a flood.

First, Munich Re will develop a mock-up of the insurance policy for one hazard – flooding – with the understanding that multiple hazards, like intense heat, or drought, could be added later, said Colin Wellenkamp, executive director of MRCTI and, as of Nov. 6, a newly elected state representative for Missouri District 105. 

The mock-up would calculate a range of premium costs and theoretical payout options that would be available for cities of varying sizes along the river. But the pilot won’t cost the cities a cent – and it won’t pay them anything either, until the pilot moves into implementation. It’s unclear which entities will ultimately foot the bill of the pilot and eventual product because it’s so early in development.

When Munich Re moves into implementation, individual city governments would hold the policies and receive payouts. Wellenkamp hopes to convince larger corporations that rely on a healthy and functioning Mississippi River hydrology to pick up the tab on the premiums, he said. 

Quick payouts could take burdens off cities

“In the first 24 to 72 hours after a disaster event, very little money can help a whole heck of a lot,” Wellenkamp said. “We use that time for evacuations and to move people out of additional harm’s way in the aftermath.”

But soon after the initial emergency response, municipalities start to look for funds for longer-term cleanup and repair. Under the current paradigm, that money can be hard to tap.  

In the spring of 2019, major flooding on the Mississippi inundated many communities, including Grafton, where the downtown partially closed and people were forced to evacuate. 

The Trump administration didn’t declare a major disaster until September of that year, months after flood waters had receded. It took until 2022 for federal money to reach Grafton, Morrow said.

“The former administration went through that flood,” Morrow said. “I’m the mayor now, and I was getting some of the money that they had put in years ago.”

That wait places stress on a city’s finances, especially smaller ones like Grafton, Morrow added. 

Traditional insurance doesn’t always help either. Grafton has a flood policy, but it only covers property owned by the city. Residents and businesses in the community would need to take out their own flood protection. The National Flood Insurance Program (NFIP), which underwrites many flood insurance policies, has various coverage restrictions. For example, NFIP doesn’t cover roads or wastewater infrastructure. 

The policies also require proof of loss before issuing a check because they cover specific damage, like to a particular building or its contents. This “proof” can take days to document, and longer to process, which delays how fast a local government can begin repairs. Without proper pre-storm documentation, damage can sometimes be nearly impossible to prove.

Parametric insurance – which works with measurable triggers and isn’t tied to documentable losses – could ease the process. 

Cities from the headwaters to the mouth of the Mississippi could buy into the policy, creating a pool that spreads out the risk that any individual community faces. 

“Not every city is going to flood every year, but the flooding will impact at least one section of the river,” said Raghuveer Vinukollu, head of climate insights and advisory for  Munich Re in the U.S.

The insurance pool would protect a town from the risk of ruin, and a more timely payout would increase the town’s resiliency through swift reinvestment in its infrastructure, he added.

Parametric insurance in the Mississippi Delta and beyond

For flooding on rivers, this kind of insurance risk pool is new territory, Vinukollu said. As climate risks become more extreme, the insurance industry is working with a number of communities to address their evolving needs, he said.

While parametric insurance is still developing, one early example stands out to Vinukollu — the Caribbean Catastrophe Risk Insurance Facility (CCRIF).

CCRIF pools risk for Caribbean countries, which face hurricane risks each year. By pooling risk together each island can receive a larger payout than if it had taken out an individual policy. 

In July, a mere 14 days after Hurricane Beryl devastated 90% of buildings and agriculture on the islands of Carriacou and Petite Martinique, the government of Grenada received its first payout from CCRIF to fund disaster recovery. 

The tropical cyclone policy paid more than $42 million to Grenada, the largest single payout from CCRIF since its inception in 2007.

In the Mississippi River Basin, Vinukollu hopes to apply this kind of shared risk pool to insure cities at risk for inland flooding. 

“The triggers are different, the perils are different, but the concept is the same,” said Vinukollu.

Given its position near the end of the Mississippi River, New Orleans is no stranger to the devastating impacts of extreme weather. Several city-run institutions, such as NOLA Public Schools, have taken out parametric insurance policies to protect important infrastructure. 

One of the first tests of these policies came in September when Hurricane Francine’s storm surge, rain and winds pelted southern Louisiana. 

But NOLA Public Schools did not receive a payout from its policy with Swiss Re. 

While wind speeds were high, they were not high enough to meet the policy’s triggers of more than 100 miles per hour for one minute.

New Orleans is more likely to experience repetitive, severe losses from named storms than a city in the upper Basin, such as Minneapolis, so cities closer to the Gulf Coast may end up paying higher premiums once the policy officially rolls out, said Wellenkamp, of MRCTI.

Cities that choose to cover more hazards or lower-level disasters may pay higher premiums because it could result in more frequent payouts, Wellenkamp said. Ultimately, municipalities could still end up footing the bill for events like the July flooding in Grafton or the Election Day storms in St. Louis.

McLeod, of Climate Resilience for All, argues communities shouldn’t expect payouts from parametric insurance all that often. “Just by the nature of the product it shouldn’t (pay every year),” she said. “Insurance is for the worst of the worst.”

Munich Re advises that parametric insurance works best to complement – not replace – traditional insurance policies. But company officials believe that these new policies offer the chance for insurance to adapt to changing risk landscapes, as weather events become more extreme.

Despite its potential to facilitate faster disaster response, parametric insurance is no silver bullet, said McLeod. 

The best solution to her is reducing the underlying risk from climate change. 

“The big picture is it’s a really important tool in financing and managing the risks of climate change, and we need every tool,” she said. 

But more than any new financial tool, McLeod said, the most effective financial step would be addressing the root causes of climate change, and building – or rebuilding – more natural protections, like wetlands.

“You’ve got to reduce the risk (or) you won’t be able to afford the insurance on it,” she said. “It’s not insurance if you know this thing is going to happen.”

The Lens’ Marta Jewson contributed reporting to this story.

This story is a product of the Mississippi River Basin Ag & Water Desk, an editorially independent reporting network based at the University of Missouri School of Journalism in partnership with Report For America and funded by the Walton Family Foundation. Wisconsin Watch is a member of the network. Sign up for our newsletter to get our news straight to your inbox.

Mississippi River towns pilot new insurance model to help with disaster response is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.