Many homes that sustained flood damage from Sandy did not have flood insurance, according to joint research by the Wharton Risk Center and Resources for the Future.

For example, along the entire New York coast, take up-rates are lower than 30 percent in most ZIP codes.

Take-up rates along the New Jersey coast seem to be higher than New York, particularly in Manhattan.

Residential flood insurance in the U.S. is primarily provided through the federally-run National Flood Insurance Program (NFIP).

The analysis shows that the state of New York has about 169,000 NFIP policies-in-force, representing $42 billion in coverage.

New Jersey is the fifth-ranked state by approximate number of NFIP policies-in-force, with about 236,000 policies-in-force, representing $55 billion in coverage.

The Wharton brief notes:

As is clear from the figures, there are higher take-up rates in coastal communities, most likely because residents are aware of the higher risk they face. That said, even in heavily flooded areas, they are still fairly low.

Given the highly populated areas where Sandy hit, this disaster is likely to cost the NFIP billions of dollars, while it’s already running a $17 billion deficit.”

A recent article by the New York Times suggested that Hurricane Sandy will rank as the nation’s second-worst storm for claims paid out by the NFIP. Hurricane Katrina triggered nearly $18 billion in claim payments by the NFIP.

Interestingly, only a handful of states account for the vast majority of policies and coverage in the NFIP. Wharton says the top five states by approximate number of policies-in-force are:

1. Florida: 2.06 million policies ($475 billion in coverage)
2. Texas: 650,000 policies ($162 billion)
3. Louisiana: 484,000 ($112 billion)
4. California: 260,000 ($68 billion)
5. New Jersey: 236,000 ($55 billion)

Earlier this summer a report by CoreLogic revealed that over four million homes in the U.S. along the Atlantic and Gulf coasts are at risk of hurricane-driven storm-surge damage, with more than $700 billion in total property exposure.

Check out I.I.I. information on flood insurance.