Some 6.5 million U.S. homes with a total reconstruction value of nearly $1.5 trillion are at risk of damage from hurricane-driven storm surge, and more than $986 billion of that risk is concentrated in 15 metro areas, according to an annual report by CoreLogic.
The 2014 analysis by CoreLogic found that by state, Florida ranks number one for the number of homes at risk, with nearly 2.5 million homes and $490 billion in total projected reconstruction costs.
At the local level the New York metropolitan area (including northern New Jersey and Long Island) contains not only the most number of homes at risk for potential storm surge damage (687,412), but also the highest total reconstruction value of residential homes exposed, at more than $251 billion.
Ranked second among the major metropolitan areas at risk is Miami, Florida with 562,410 homes exposed and a total reconstruction value of $103.2 billion, followed by Tampa, Florida with 444,765 homes at risk and a total reconstruction value of $79.1 billion.
CoreLogic makes the point that just one storm of sufficient intensity occurring in or near one of the major metropolitan areas in the report is all that would be needed to cause tens of billions in property damage:
CoreLogic goes on to explain that extensive regions along both the Gulf and Atlantic Coasts are vulnerable to storm surge, and yet many of the homeowners who live in these areas are not required to carry flood insurance because they are not located within a designated FEMA 100-year floodplain.
With just over a week to go until the start of the 2014 Atlantic hurricane season, NOAAâ€™s outlookÂ is hot off the press and garnering a lot of attention.
Hereâ€™s NOAAâ€™s take on the season by the numbers:
â— NOAA is calling for a 50 percent chance of a below-normal season, a 40 percent chance of a near-normal season, and only a 10 percent chance of an above-normal season.
â— NOAA predicts a 70 percent likelihood of 8 to 13 named storms (winds of 39 mph or higher), of which 3 to 6 could become hurricanes (winds of 74 mph or higher), including 1 to 2 major hurricanes (Category 3, 4 or 5; winds of 111 mph or higher).
â— These numbers are near or below the seasonal averages of 12 named storms, six hurricanes and three major hurricanes, based on the average from 1981 to 2010.
What are the reasons behind NOAAâ€™s predictions for a near-normal or below-normal season?
A key driver of this yearâ€™s outlook is the anticipated development of El NiÃ±o this summer that is expected to cause stronger wind shear which reduces the number and intensity of tropical storms and hurricanes.
Cooler Atlantic Ocean temperatures this season also suggest fewer hurricanes, NOAA says.
Despite the prognosis for a below-normal or near-normal season, itâ€™s important that coastal residents donâ€™t underestimate the hurricane threat. As Dr. Kathryn Sullivan, NOAA administrator says:
Hurricane forecasters are sounding a warning bell for the U.S. East coast in their latest predictions for the 2014 hurricane season, even as overall tropical storm activity is predicted to be much-less than normal.
WeatherBell Analytics says the very warm water off of the Eastern Seaboard is a concern, along with the oncoming El NiÃ±o conditions.
In its latest commentary forecaster Joe Bastardi and the WeatherBell team notes:
Meanwhile, London-based consortium Tropical Storm Risk (TSR) has lowered its forecast and predicts Atlantic hurricane activity in 2014 will be about 25 percent below the 1950-2013 long-term norm and about 40 percent below the recent 2004-2013 10-year norm.
In its updated forecast TSR is calling for 12 named storms, 5 hurricanes and 2 major (Category 3 and higher) hurricanes.
TSR says two key factors in its forecast for below-normal activity are: lighter trade winds over the Caribbean and North Atlantic coinciding with the likely development of a moderate El NiÃ±o; and cooler than normal sea surface temperatures in the tropical North Atlantic.
TSR says both these predictors will have a moderately suppressing effect on activity.
A post over at Artemis blogÂ points out that while El NiÃ±o typically results in a below average hurricane season in terms of the number of storms that form, that is no guarantee of a benign season in terms of catastrophic losses as that is down to the strength or severity and path of any storms that do form.
Updated forecasts will be released around June 1, when hurricane season opens.
As the 2013 Atlantic hurricane season comes to a close, it may be easy to dismiss the significance of this yearâ€™s season.
While itâ€™s true that this year had the fewest number of hurricanes since 1982, the 2013 hurricane season was only the third below-normal season in the last 19 years, since 1995, when the current high-activity era for Atlantic hurricanes began, according to forecasters.
A NOAA press release quotes Gerry Bell, lead seasonal hurricane forecaster at NOAAâ€™s Climate Prediction Center, a division of the National Weather Service:
A total of 13 named storms formed in the Atlantic basin this year, NOAA reports, but only two, Ingrid and Humberto, became hurricanes. Neither of these storms became a major hurricane (Category 3, winds of 111-129 mph and above).
Although the number of named storms was above the average of 12, the numbers of hurricanes and major hurricanes were well below their averages of six and three, respectively.
While the size of the residual property market in hurricane-exposed states in 2012 declined from the peak in exposure value and policy counts seen in 2011, the market overall remains at near-record levels, the Insurance Information Institute (I.I.I.) says.
Despite attempts by certain states to reduce the size of their plans, the fact of the matter is that this market of last resort remains the market of first choice for many vulnerable, high-risk coastal properties, the I.I.I. says.
As we approach the peak of hurricane season, catastrophe modeler RMS has warned that storm surge poses a greater risk than hurricane wind.
RMS says its updated North American hurricane model shows there is a 20 percent chance that storm surge loss will be greater than wind loss for any U.S. hurricane that makes landfall. AndÂ for theÂ northeast coast of the U.S. the risk is even higher.
Dr. Claire Souch, vice president, model solutions at RMS says:
Recent analysis by CoreLogic estimates that more than 4.2 million U.S. residential properties are exposed to storm-surge risk valued at roughly $1.1 trillion, with more than $658 billion of that risk concentrated in 10 major metro areas.
A steady rise in the number and value of exposed properties along the U.S. Gulf and East Coasts continues â€“ and remains the largest factor increasing the hurricane risk of property insurers today, according to catastrophe modeling firm AIR Worldwide.
AIR just released an updated version of its report The Coastline at Risk, showing that the insured value of residential and commercial properties (the replacement value or cost to rebuild) in coastal counties now exceeds $10 trillion.
In coastal counties of Florida and New York, values approach $3 trillion in each state.
Overall, AIR estimates that some 38 percent of the total exposure in Gulf and East coast states is located in coastal counties. This exposure accounts for nearly 16 percent of the total value of properties in the U.S.
New York edges Florida as the state with the highest coastal property values, at over $2.9 trillion, but Florida has the largest proportion of its value in coastal counties at 79 percent.
An annual report from CoreLogic reveals that the number and value of total properties along the Atlantic and Gulf coasts at risk of hurricane-driven storm surge is increasing significantly.
In its 2013 analysis CoreLogic estimates that more than 4.2 million residential properties are exposed to storm-surge risk valued at roughly $1.1 trillion, with more than $658 billion of that risk concentrated in 10 major metro areas.
Florida tops the state rankings with nearly 1.5 million properties at risk and $386 billion in total potential exposure to damage.
Louisiana ranks second in total properties at risk with just over 411,000 homes in storm-surge zones, while New York ranks second in total value of coastal properties exposed at nearly $135 billion.
At the local level, the New York metropolitan area, which encompasses northern New Jersey and Long Island as well, contains not only the highest number of homes at risk for potential storm-surge damage, but also the highest total value of residential property exposed, at more than $200 billion.
CoreLogic makes the point that extensive regions along both the Gulf and Atlantic coasts are vulnerable to storm surge, and yet the homeowners who live in these areas are not required to carry flood insurance because they are not located within a designated FEMA 100-year floodplain.
Meanwhile, London-based consortium Tropical Storm Risk is calling for 15 named storms, of which it predicts eight will become hurricanes, and three major hurricanes. TSR forecasts Atlantic basin tropical cyclone activity at about 30 percent above the 1950-2012 long-term norm, but slightly below the recent 2003-2012 10-year norm.