Wetlands loss has increased residential flood insurance claim payments by $10 billion

By calculating the value of wetlands in reducing flood damage, findings can inform federal and state land use decisions, wetland protection, benefit-cost analysis and flood insurance policy.

Peer-Reviewed Publication

Environmental Defense Fund

News Release 2-Jun-2026

(Washington, D.C. – June 1, 2026) – A new study published in Nature Water finds that wetland loss across the United States has increased residential flood insurance claim payments by more than $10 billion since 1985, underscoring the critical role wetlands play in reducing riverine flood damage.

Authored by Environmental Defense Fund (EDF) experts, Jesse Gourevitch and Adam Gold, along with Helena Garcia, PhD candidate at the University of North Carolina at Chapel Hill, the study links changes in upstream wetland area to downstream National Flood Insurance Program (NFIP) claims at the sub-watershed level nationwide. The analysis focuses specifically on riverine flooding—how the loss of upstream wetlands affects downstream flood damage along rivers and streams.

“As flooding becomes more frequent and severe, communities need reliable information about what reduces flood risk and what makes it worse,” said Jesse Gourevitch, former economist at EDF and lead author of the study. “Our findings show that wetlands are a form of natural infrastructure that reduces flood damage, and that losing them has created real costs for households and communities. This research can help state and federal decisionmakers better account for the value of wetlands in land use policy, benefit-cost analysis and flood insurance.”

This research improves upon previous studies by estimating the effects of changes in upstream wetland area between 1985 and 2023 on individual flood insurance claim payment amounts, controlling for local precipitation immediately prior to those claims and properties’ underlying exposure to flood risk.

Key findings include:

• Residential flood insurance claim payment amounts increase by an average of 0.01% to 0.03% per hectare (roughly 2.5 acres) of upstream wetland loss. This amounts to a total increase nationwide to $10.1 billion, or 9.0% increase in claims due to wetland loss since 1985. The areas where costs increased the most are the Houston metropolitan area, southeastern Louisiana and coastal Florida. 

• Existing wetlands provide substantial value in reducing riverine flood damage losses. In the top ten percent of sub-watersheds, every one hectare of wetlands provides at least $24,783 in residential flood risk reduction value. In the top one percent of sub-watersheds, these values exceed $301,268.

• In 16% of sub-watersheds, notably in critical regions of Kentucky, West Virginia and Pennsylvania, areas that have been hard hit by flood events, the benefits of protecting wetlands outweigh the costs of conservation. In other areas, reducing further loss through wetland protection would help avoid dramatic increases in damage costs in the future.

• Historical wetland loss disproportionately increased flood damage in lower-income communities and communities with higher shares of non-white residents.

Because the National Flood Insurance Program insures only a portion of total flood losses, the full costs of historical wetland loss are likely substantially higher. The study notes that only about 30% of average annual flood losses are insured by the NFIP; when accounting for uninsured or privately insured losses, the total costs of historical wetland loss since 1985 could exceed $33 billion.

“Wetlands act like natural sponges during heavy rain, storing floodwater and slowing runoff before it moves downstream,” said Adam Gold, senior manager of coasts and watersheds science at EDF and co-author of the study. “Yet wetlands continue to disappear, in part because the value of the services they provide is often overlooked. Our analysis helps fill that information gap.”

In addition to reducing flood damage, wetlands provide a wide range of other benefits, including wildlife habitat, improved water quality, carbon storage and recreation. This study examined only the value of wetlands in reducing riverine flood losses to residential properties. When considering wetlands’ many additional benefits—including flood protection for commercial and public assets—their total value is significantly higher.

The findings can help federal agencies improve benefit-cost analyses for wetland regulation and infrastructure spending, support state lawmakers considering wetland and land use policy, guide conservation investments such as easements and acquisitions, and inform how flood risk reduction is reflected in flood insurance pricing.

The study also provides critical details that could inform the new federal definition of “Waters of the United States” (WOTUS) being proposed by the Trump Administration. If this new rule, which would require a wetland to have long-term surface water in order to be protected, goes into effect, up to 91% of non-tidal wetlands could be considered non-WOTUS wetlands. After accounting for state-level protections and conserved lands, this study estimates that non-WOTUS wetlands without additional protections provide roughly $177 billion in flood mitigation benefits to residential properties alone, highlighting what may be at stake as policymakers consider the future of wetland protections.

To read the full study, visit: https://www.nature.com/articles/s44221-026-00656-3 

For a summary of the key findings, read our Market Forces blog post: https://blogs.edf.org/markets/2026/06/01/new-research-shows-whats-at-stake-when-wetlands-disappear/ 

Explore the interactive web map here: https://www.edf.org/maps/wetlands-flood-reduction/ 

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