It once was. Insurance companies were taking losses on flood claims, so they separated flood coverage and raised rates. Then FEMA's National Flood Insurance Program was introduced to make sure building and rebuilding in high-risk areas would remain affordable. FEMA's National Flood Insurance Program had 87% of all flood premiums nationwide in 2017. To make the simple economics work, FEMA borrows from the Treasury. It is now about $25 billion in debt. The debt limit is $30 billion, and the program was scheduled to sunset this year, but Congress authorized an extension.Insurance will eventually be the lever
(Yeah, FEMA funds are available, but even those are limited.)
According to the Federal Emergency Management Agency, houses that repeatedly flood account for 1% of NFIP’s properties but 25-30% of its claims. Five states, Texas among them, have more than 10,000 such households and, nationwide, their number has been going up by around 5,000 each year. Insurance is meant to provide a signal about risk; in this case, it stifles it.