Low flood insurance uptake leaves Alaska exposed to growing risk

By Mia MacGregor

Aug 19 - (The Insurer) - Glacial outburst floods are escalating in severity in Juneau, Alaska, prompting emergency defenses, damaging homes and accelerating efforts to develop lasting protections in a state with notably limited flood insurance coverage.

Meltwater from Suicide Basin, a lake dammed by the Mendenhall Glacier, surged into Mendenhall Lake and the Mendenhall River last week, triggering a National Weather Service flood warning and evacuation advisories. The surge set record water levels at the lake on August 13, local officials said.

“Since 2023 we’ve seen these outburst floods increase in severity due to the amount of water that’s been released in one sitting,” said Aaron Jacobs, a senior service hydrologist and meteorologist at the NWS Juneau office.

"We're now seeing full basins releasing all their water all at once. Prior to 2023, we only experienced partial releases. The community has been really aware of these events, but the impacts and severity have increased over the last couple of years.”

Temporary barriers deployed this year mitigated some damage, though certain homes were still inundated, Jacobs noted. He specifically cited the effectiveness of Hesco barriers, large, reinforced sandbags designed to protect properties, in shielding parts of the community. However, he acknowledged that some areas "still saw some pretty significant flooding along their homes".

"These outburst floods are not going away anytime soon," Jacobs warned.

"Glaciologists are informing us that the glacier will continue to impound Suicide Basin for another 20 to 30 years. The community will be dealing with this for a couple of decades, so they are seeking a more permanent solution than temporary barriers."

Outburst floods from Suicide Basin have occurred annually since 2011, with last summer's event damaging hundreds of residences.

LIMITED FLOOD INSURANCE PENETRATION

Despite the escalating threat, insurance coverage for flood risk across Alaska remains sparse.

According to data from the Alaska Department of Commerce, Community, and Economic Development, 34 communities in Alaska participate in the National Flood Insurance Program (NFIP), encompassing 176 cities and approximately 87% of the state's population.

However, the overall penetration rate of NFIP policies remains low when compared with the state's housing stock. Alaska's Census Bureau reports approximately 326,200 homes in the state. As of July 2025, there were 3,140 active NFIP policies in Alaska, meaning just 0.96% of homes are insured through the program.

A 2023 report by the National Association of Insurance Commissioners (NAIC) further underscored this vulnerability, identifying Alaska, along with Wyoming, South Dakota, Vermont and Utah as having the fewest NFIP policies nationwide.

From 2008 to 2021, Alaska policyholders paid $41.5 million in NFIP premiums and fees and received $6.5 million in claims, a net contribution of about $34.9 million, according to FEMA data. By contrast, Texas paid $6.70 billion and received $14.02 billion in claims over the same period.

Alaska lawmakers are exploring options to address the state's growing flood threat and its low insurance penetration. A bill introduced in January by Senator Bert Stedman, a Republican from Sitka, aims to establish an Alaska flood authority and an insurance fund to protect against the peril. The measure advanced through committees this year and is slated for further review next session.