Commemorating the start of the 2017 Hurricane season, CoreLogic, a leading global property information, analytics, and data-enable solutions provider, released its 2017 Storm Surge Report on June 1, 2017. Alarmingly, this report projects that almost 6.9 million homes along the Atlantic and Gulf Coasts are at potential risk of hurricane storm surge damage with a total Reconstruction Cost Value (RCV) of more than $1.5 trillion.

Florida, Louisiana, Texas, New York and New Jersey rank as the top five states with the most homes at risk.

According to the National Hurricane Center, a storm surge, is often the greatest threat to life and property from a hurricane. Storm surge is an abnormal rise of water generated by a storm, over and above the predicted astronomical tide. When it comes to hurricanes, there is a misconception that the winds will cause most of the property damage, when it’s the water that could potentially cause the greatest devastation. This is often overlooked until it is too late. Hurricane Katrina and SuperStorm Sandy are prime examples of the massive damage and devastation that can be caused by storm surge and the large number of people under or uninsured for such a catastrophe.

In the United States, flooding from storm surge is by far the most catastrophic and costliest natural disaster. According to FEMA, every state has experienced some form of flooding due to storm surge or flash flooding in the past five years. Paradoxically, only about five million property owners protect their assets by purchasing flood insurance. Historically, homeowners and business owners have failed to appreciate the cost and extent of damage a water event could cause until it is too late. When disaster strikes, all too often our clients state they believed their property was protected under their homeowner policies or that flood insurances is unnecessary because it’s not mandatory. Both beliefs are false and illustrate the lack of appreciation for the need to protect against a low-frequency, high severity risk.

Hurricane season is here to stay for the next six months, so all homeowners—but especially those residing near the coastline—need to review their policies to verify they have adequate and proper coverage. If there is any uncertainty, they should contact their insurance broker to confirm their needs are being met by their existing policy.

  • llewellynh

    Does this modeling include Climate Change?

    And to put NJ near the top makes no sense considering so many people now are living on 10-14′ foot pilings where before Sandy many of those homes were all of 1′ above the ground. They often were just summer houses and now are full blast built to FEMA codes, new houses.

    And Sandy was a 1 in 736 year storm and not a hurricane. NJ doesn’t have a long history of hurricanes. And to my knowledge anyway, no insurance company is even offering us alternatives to NFIP which is the most overhead driven insurance group ever formed and which gives people very little in the way of return.

    • Nicole F. Levine

      Storm Surge Methodology:

      “Year-over-year changes in the number of homes at risk and RCV can be the result of several variables, including new home construction, improved public records, enhanced modeling techniques, fluctuation in labor, equipment and material costs and even a potential rise in sea level.”

      Storm Surge Risk: By State:

      “There is substantial variation in storm surge risk by state. Factors such as the length of a state’s coastline, coastal elevation and the density of residential development all combine to determine the susceptibility of an area to flooding from storm surge. As previous analysis has shown, Texas and Florida consistently have a greater number of homes at risk than other states, primarily due to the length of their respective coastlines.”….. “Length of coastline is one reason a state may have a high number of homes at risk of storm surge, but it is not the only reason. States like Louisiana, which is ranked second with 800 thousand homes at risk, and New Jersey, which is ranked fourth with almost 470 thousand homes at risk, both have geographic characteristics that make them susceptible to storm surge. In both states the near-shore elevations tend to be much lower, affording the storm surge easier inland access and enabling the flood water to carry farther from the coast. Based on the potential for flooding farther inland, Louisiana ranks second with an RCV of almost $181 billion, and New Jersey ranks fourth at $140 billion.”
      CoreLogic 2017 Storm Surge Report

  • James Purcell

    If you really want to verify you have adequate and proper coverage, contact an attorney that specializes in property insurance claims to review your policy!

    • Chip Merlin

      James,
      I appreciate the solicitation for more business!!
      The truth is that very good insurance agents are trained much more than attorneys at law about how to avoid gaps in coverage and getting coverages that are available in the market. Go to the best insurance agents and buy quality over price every time.
      If you want to know of horror stories from policyholders that go to agents that sell insurance on price, go to the attorneys you mention above.
      Always good to hear from you.

  • rogerpoe

    If existing policies are Not covered by proper reserves, what real value do they actually have?