6.5 million homes on U.S. Atlantic, Gulf coasts ‘at risk’ of storm surge from hurricanes

More than four in five homes in the metropolitan area containing Norfolk and Virginia Beach are “at risk of” hurricane-driven storm surge but not in a flood zone designed by the United States Federal Emergency Management Agency (FEMA), while homes at “extreme” risk in Florida, if totally destroyed, would cost nearly US$166 billion to rebuild, suggests a press release this week from property risk data provider CoreLogic Inc.

“Homeowners who live outside the FEMA flood zones typically do not carry flood insurance, given that there is no mandate to do so, and therefore may not be aware of the potential risk storm surge poses to their properties,” CoreLogic stated in a release Thursday. “The standard FEMA flood zones are designed to identify areas at risk for both freshwater flooding as well as storm surge based on the likelihood of either a 100-year or a 500-year flood event. They do not differentiate risk based on storm severity, and as a result, do not effectively define the total extent of the risk possible along coastal areas.”

Irvine, Calif.-based CoreLogic included flood risk data on 15 urban areas designed by as core-based statistical areas (CBSAs) by the U.S. Census Bureau. In the CBSA of Virginia Beach-Norfolk-Newport News, located on the Atlantic coast of Virginia, there are 395,584 homes “exposed to flood or surge inundation,” CoreLogic reported, noting 86% of them are not in a designated FEMA flood zone. That table compared homes that are not in FEMA’s 100-year flood zones to those in FEMA special flood hazard area (SFHA) and in surge inundation zones.

Meanwhile, in the CBSA in and neighbouring New York City, there are 725,020 home exposed to flood or surge inundation, 68% of which are not in a FEMA-designated flood zone, CoreLogic reported.

“According to the findings, more than 6.5 million homes along the U.S. Atlantic and Gulf coasts are at risk of storm surge inundation, representing nearly $1.5 trillion in total potential reconstruction costs,” CoreLogic reported. “More than $986 billion of that risk is concentrated within 15 major metro areas.” All figures are in U.S. dollars.

“This exposure could constitute significant risk for homeowners and financial services companies, as many at-risk homes lack protection from insurance coverage,” CoreLogic warned.

“Though the 2013 hurricane season will be remembered for the fact that no storms made landfall along the U.S. coast, this reprieve from hurricane-related damage should not lead to complacency in preparing for future storms and the potential life-threatening conditions they can bring,” stated Thomas Jeffery, senior hazard scientist for CoreLogic Spatial Solutions, in the release.

CoreLogic also included a table with 19 states plus the District of Columbia, listing reconstruction value of properties at risk of hurricane-driven storm surge. It broke down each state into degrees of risk: extreme, very high, high, moderate and low. Florida has 2.49 million properties at risk, with a reconstruction value of $490.4 billion. Of those, there are 789,090 homes at “extreme” risk with an estimated reconstruction value of $165.9 billion.

CoreLogic’s estimates of reconstruction costs are based on total destruction of the residential structure and accounts for labour and materials.

The total potential reconstruction value of homes at risk in New York state was pegged at US$182.4 billion.

“Recent regulatory guidelines are compelling financial services companies subject to federal stress testing to understand under-insured or uninsured risks like storm surge flooding, since exposed properties have a significant risk for default following an event,” CoreLogic noted.

CoreLogic’s products include data on property, location and hazard risk.