Homeowners suffering flood damage from Harvey are more likely to be on the hook for losses than victims of prior storms – a potentially crushing blow to personal finances and neighborhoods along the Gulf Coast. “I want to thank FEMA for giving insurance policy holders a little more time”.
Right now the insurance program is borrowing from the U.S. Treasury to cover its costs, which means that ultimately, taxpayers could be on the hook.
“Harvey was nearly certainly more intense than it would have been in the absence of human-caused warming, which means stronger winds, more wind damage, and a larger storm surge”, said Michael Mann, professor of Atmospheric Science at Penn State.
In the Houston area, rainfall already has surpassed that of tropical storm Allison in 2001, which wreaked roughly $12 billion of damage in current dollars. After all, they mostly just cover wind damage rather than destruction from mass floods, which accounted for the bulk of the damage.
“The measure that passed does nothing to lower insurance premiums or protect homeowners”, Turner, head of the House Democratic Caucus, said when it passed.
The program has always been a federal backstop for areas prone to flooding, providing coverage to homeowners when insurance companies won’t.
Insured homeowners pay a monthly premium.
Much of the Houston area falls outside those most vulnerable zones and many homeowners who aren’t forced to have coverage have made a decision to do without.
Hagins recommends documenting any flood damage with photographs and video, and to only make temporary repairs if they are needed prior to the adjuster coming out.
There were more than 100,000 flood policies in Palm Beach County as of March 31, including more than 66,000 in unincorporated areas, almost 15,000 in Boca Raton, more than 9,000 in Boynton Beach, and more than 7,000 each in Jupiter, Palm Beach and Delray Beach. “Translating our results into the context of Houston would suggest that 23,000 residents would move away from the area over the next 10 years”, she told AFP.
“We believe a large proportion of economic losses will be uninsured or covered by the government’s National Flood Insurance Program (NFIP), as losses are likely to be more heavily flood-related than wind-related”, the rating agency explained. Lightbody says that less than 1% of the policyholders receive 25-30% of the claims filed because they file repeatedly. If the water rushes through the floorboard or walls, you’re not covered. The Cypress River, which runs through downtown Houston, is expected to rise four feet higher than the record 94.3 feet set in 1949, according to Air Worldwide, a risk modeling firm.
House of Representatives Speaker Paul Ryan’s office said it was confident the program would be reauthorized. That figure did not include money that would be paid by NIFP, he added.
Harvey will likely rank among the top 10 most expensive US storms with $10 billion to $20 billion in losses covered by insurance, JPMorgan analyst Sarah DeWitt said.
For homeowners facing big bills, some banks may be willing to help.
Florida has more of the nation’s 5 million flood policies than any other state, close to 40 percent.
Customers who contact Wells Fargo can get disaster relief for 60 to 90 days, and can postpone payments. In that case it would be “prudent” to to pass a short-term extension, he said.
Fitch Ratings said that anticipated losses from the National Flood Insurance Program’s (NFIP) $1bn reinsurance programme will be manageable for the carriers involved. Homes in those areas have a one percent chance of flooding in any given year.
“People buy coverage immediately after a storm, then it starts to drop”, Worters said.
Goldman Sachs estimated on Monday that Harvey’s disruptions to the energy sector alone could shave as much as 0.2 percentage points off of US GDP growth in the third quarter of this year.