A new UC Davis study finds that California is not benefiting from participating in the National Flood Insurance Program and that the state may be better off running its own program.

California has received only a small fraction of economic benefits from participating in the National Flood Insurance Program compared to the premiums it has paid. Scientists at UC Davis examined NFIP databases and found that since 1994, damage payouts have totaled just 14 percent of premiums collected.

The state had some of its most damaging floods during the period. The study's author suggests California partner with private insurers and reinsurers to provide flood insurance.

"California would need to design such a program very very carefully, but the payoffs are obvious," says Nicholas Pinter, with the UC Davis Center For Watershed Sciences. "California has paid in more than $3 billion more than it’s received in payments over the last 21 years. That's a massive investment that could have been used for other higher priorities."

Pinter says the money saved could be invested in projects that reduce flood risk. The state currently has 290,000 National Flood Insurance Program policies.

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