Wetland Loss Has Added $10 Billion in Residential Flood Insurance Claims Since 1985, Study Finds

A study published in Nature Water puts a price on something that usually goes uncounted: the wetlands the country has drained or built over since 1985. Its answer is that the loss has added more than $10 billion to residential flood insurance claim payments. The work was done by Jesse Gourevitch and Adam Gold, both of the Environmental Defense Fund, together with Helena Garcia, a Ph.D. candidate at the University of North Carolina at Chapel Hill.

The team linked changes in upstream wetland area to downstream claims under the National Flood Insurance Program, working at the sub-watershed level across the country. They looked only at riverine flooding, meaning how losing wetlands upstream affects damage along rivers and streams downstream. They estimated how changes in wetland area between 1985 and 2023 affected the amount paid on individual claims. They controlled for rainfall just before each claim and for how exposed each property was to flood risk, which the authors say improves on earlier studies.

On average, each hectare of upstream wetland lost, roughly 2.5 acres, raised residential claim payments by 0.01% to 0.03%. Added up nationwide, that comes to $10.1 billion, a 9.0% increase in claims attributable to wetland loss since 1985. The biggest cost increases were in the Houston metropolitan area, southeastern Louisiana and coastal Florida.

The study also measures what remaining wetlands are worth. In the top ten percent of sub-watersheds, each hectare provides at least $24,783 in residential flood risk reduction. In the top one percent, that value exceeds $301,268. In 16% of sub-watersheds, notably in parts of Kentucky, West Virginia and Pennsylvania that have been hit hard by floods, the benefits of protecting wetlands outweigh the costs of conservation. Elsewhere, the authors say, limiting further loss would help avoid steep increases in damage costs down the line.

The burden has not fallen evenly. The researchers found that historical wetland loss disproportionately increased flood damage in lower-income communities and in communities with higher shares of non-white residents.

The $10.1 billion is likely an undercount. The NFIP covers only a portion of flood losses; the study notes that about 30% of average annual flood losses are insured by the program. Accounting for uninsured and privately insured losses, the authors say the total cost of wetland loss since 1985 could exceed $33 billion. The analysis also covers only residential properties and only flood damage. Wetlands also provide wildlife habitat, water quality improvement, carbon storage and recreation, and they protect commercial and public assets, none of which are counted here.

"Wetlands act like natural sponges during heavy rain, storing floodwater and slowing runoff before it moves downstream," said Gold, a senior manager of coasts and watersheds science at EDF. He said wetlands keep disappearing partly because the value of what they do is often overlooked, and that the analysis is meant to fill that information gap. Gourevitch, a former EDF economist and the lead author, described wetlands as natural infrastructure and said the findings could help state and federal decision makers account for them in land use policy, benefit-cost analysis and flood insurance.

The authors say the results could help federal agencies refine benefit-cost analyses for wetland regulation and infrastructure spending, support state lawmakers, guide conservation easements and acquisitions, and shape how flood risk reduction is reflected in insurance pricing.

The timing connects to a policy fight. The Trump Administration has proposed a new federal definition of "Waters of the United States," which would protect a wetland only if it has long-term surface water. Under that rule, up to 91% of non-tidal wetlands could fall outside federal protection. After accounting for state protections and conserved lands, the study estimates that unprotected non-WOTUS wetlands provide roughly $177 billion in flood mitigation benefits to residential properties alone. Whether that figure enters the rulemaking debate is the next thing to watch.