Yikes! A report released by CoreLogic, a financial and real estate data company revealed that more than 6.5 million homes along the Atlantic and Gulf coasts are at risk of hurricane storm-surge damage, with New York City having the most homes and value at risk.
You might say, “didn’t we know this before?” Well, yes and no. CoreLogic recently changed its methodology to include reconstruction-cost value. The study found that the vulnerable homes represent $1.5 trillion in potential reconstruction costs, with nearly two-thirds—$986 billion—of that risk concentrated in 15 metro areas. The top four, in order of potential properties affected, are New York City, Miami, Tampa and Virginia Beach, Va. This is of course obvious but the damage and the potential losses are rising and will continue to rise as more houses are built along the coast and as property values continue to rise post-recession.
The insured value of homes and businesses in coastal areas from Texas to Maine—the U.S. states most vulnerable to hurricanes—was $10.6 trillion in 2012, up 48% from 2004, according to AIR Worldwide, which measures risk for insurers. Many homes at risk are in areas not designated as flood zones by FEMA.
One amazing fact revealed in the study was that many cities have homes at risk of storm surge, but those homes aren’t required to carry flood insurance because they aren’t located in a floodplain designated by the Federal Emergency Management Agency.
In the Virginia Beach, Va., metro area, 86% of the homes at risk of storm surge weren’t designated in a FEMA flood zone. In the Philadelphia metro area, 85% of the homes at risk weren’t in a designated floodplain and in Jacksonville, Fla., 76% of those at risk weren’t in a floodplain, and wouldn’t be required to carry flood insurance.