Review of Underwater: Loss, Flood Insurance, and the Moral Economy of Climate Change in the United States by Rebecca Elliott

Insurance is ubiquitous in American society and yet, as many insurance experts often lament, few understand how insurance works. In Underwater: Loss, Flood Insurance, and the Moral Economy of Climate Change in the United States, Rebecca Elliott provides a sociological study of the National Flood Insurance Program (NFIP), the United States’ residential market for flood insurance. Elliott details how the program works as a social and political arena for negotiating “the terms upon which we organize our interdependence” (p. 191). Elliott gives voice and sensibility to Americans’ lived experiences with the deeply fraught insurance program by analyzing interviews with New Yorkers affected by increasing NFIP costs, congressional hearings, political debate about the NFIP, and scholarly research.

Underwater is well suited for students and researchers examining the large-scale challenges associated with managing catastrophic risk through the application of insurance. It is accessible to a broad audience, including nonexperts and those with expertise in fields outside of sociology.

The structure of the book follows from Elliott’s theoretical lens of moral economy, the moral justifications given for structuring the economic arrangements that govern daily life. As Elliott asserts, “the establishment of an insurance program, even one for natural hazards, is inevitably a moral project” (p. 68). Through this lens Elliott explores the ways different interests understand risk, flood loss, responsibility for loss, and deservingness of program support.

After a general orientation to the study in the Introduction, Chapter 1 provides a historical account of the moral justifications heard by legislators as they worked to create the program. This chapter is imperative reading. It documents root causes of the program’s greatest challenges in balancing actuarially determined measures of risk with affordability for risky properties and holding communities accountable for land management practices while encouraging economic development through homebuilding. In this sense, Elliott observes NFIP’s major success: “It has buoyed American homeownership, transformed some measure of relief into a contractual obligation to compensate loss, and enshrined a privileged role for science and economics in knowing and managing the problem of flood losses, now treated in terms of risk” (p. 69).

Chapter 2 captures the ways New Yorkers have made meaning of the increased costs that the Biggert-Waters Act of 2012 would have had when new flood maps for New York City were deployed. The chapter focuses on the social processes and outcomes around this roll-out of maps and policy. Elliott captures how insurance works in people’s lives rather than in theory. She explains that when faced with new maps of flood risk focused on one type of loss people began contemplating other kinds of loss. By providing glimpses into people’s personal lives, Elliott demonstrated how the maps presented value trade-offs that struck at middle class finances, such as the ability to send children to college.

In Chapter 3, Elliott tackles the subjectivities and embedded moral judgements in the social process of measuring flood risk. She describes an important and underrecognized contradiction in public debate about the NFIP, specifically how “the arcane technologies and procedures used in governing on the basis of risk appear to operate technically, but also always operate morally” (p. 107). Thus, Elliott finds that “reasonable” measures of risk and pricing are not so much about accuracy as they are about the “moral economic concerns related to the legitimate distribution of responsibilities for bearing or sharing flood risk” (p. 107). The processes of negotiating different ideas of reasonableness are covered in Chapter 4 as Elliott explains how and why major congressional efforts to reform the NFIP unfolded as they did.

Elliott looks toward the future in Chapter 5, considering flood risk management and how the NFIP may evolve under climate change. In this context, the future is thought to be different from the past and many estimates are possible. Elliott describes the complex politics that arise from this context as different interests advance preferred “imaginaries” (p. 167) of climate-affected flood risk.

In the concluding chapter of the book, Elliott brings together her own thoughts on the history and future of the NFIP, noting the shortcomings of the long-standing debate and the power implied in contemporary problem frames. She argues that persistent attention to “classifying, as precisely as possible, who is at how much risk and what each person’s risk should cost” (p.211) obscures the broad collective failures in policy approaches to land use and housing. There is more promise for advancing the public interest in direct interaction with these policies “rather than trying in vain” (p. 212) to shape urban development through incentivizing private actors—a tactic that historically benefits the real estate and financial industries.

Elliott’s gift as a writer brings to life the complexities of the NFIP—a policy that undergirds a not insignificant portion of the American economy tied to housing, which in turn remains a primary means of wealth creation for the middle class. Though the book’s title suggests climate change presents a new phase for the NFIP and US flood risk management, Elliott weaves together a story that captures the long-running debate about how to measure risk. Different understandings of risk result in different sets of winners and losers among the public, both epistemologically and in business. Estimates of flood risk under climate change feed an already burning fire whereby the ability and diversity of ways to measure risk challenges existing societal institutions. As Elliott notes, “the power to define risk is also the power to define responsibility” (p. 118). As such, the book warns that intense focus on measuring climate changed flood risk detracts attention from practical land use and housing policy reform, while at the same time shifts responsibility for risk from communities to individuals. Aptly named, Underwater captures the way ideas of flood risk are tied to moral sensibilities and have created the politics of the NFIP.