Category Archives: Flood Insurance

Harvey vs. Irma: Every Hurricane is Different

Hurricane Irma begins its assault, while Texas and Louisiana begin the long road to recovery from Hurricane Harvey.

No one, of course, knows exactly what damage Irma will unleash, but it is likely to be quite different from what Harvey wrought. That’s because no two storms are alike.

Business Insider touches on the differences:

While Harvey’s record rains drenched southeastern Texas and western Louisiana, flooding Houston in over 4 feet of rainfall, Irma’s winds — if they stay as strong as they were on Tuesday evening — could flatten buildings, trees, and power lines on the Caribbean islands it’s threatening to devour.

At its peak, Harvey was a Category 4 hurricane on the Saffir-Simpson scale, but its weakened winds downgraded it to a tropical storm the day after it made landfall. Irma, meanwhile, is a Category 5 monster that’s already one of the strongest Atlantic hurricanes ever recorded — and it’s still strengthening.

Meanwhile, Live Science laments the problems with shoehorning all the complexities of a hurricane into a single number, like Category 5.

As a Category 4 storm, Harvey’s winds meaning landfall blew between 130 and 156 mph. But catastrophe modeling firm RMS said the storm packed only one-fifth the total energy of Hurricane Ike, a Category 2 storm that struck the same area in 2008.

Harvey became an enormous flood because the storm lost almost all its forward momentum upon reaching land.

Meanwhile Irma is among the most powerful storms ever to cross the Atlantic, but doesn’t threaten a Harvey-like deluge. It is delivering, however, bark-shredding winds that will cause catastrophic damage.

Both storms, though, are tragedies.

Harvey survivors can learn more about filing flood insurance claims here. They can learn about filing other insurance claims here. For other types of federal disaster assistance, click here.

If you are bracing yourself for Irma, FEMA has advice here.

Irma strikes Leeward Islands, Forecast to Turn North Toward Florida

Associated Press (via NY Daily News):

The most powerful Atlantic Ocean hurricane in recorded history made its first landfall in the islands of the northeast Caribbean early Wednesday, churning along a path pointing to Puerto Rico, the Dominican Republic, Haiti and Cuba before possibly heading for Florida over the weekend.

The eye of Hurricane Irma passed over Barbuda around 1:47 a.m., the National Weather Service said. Residents said over local radio that phone lines went down. Heavy rain and howling winds raked the neighboring island of Antigua, sending debris flying as people huddled in their homes or government shelters.

CNN notes that the eye of the storm was bigger than the island of Barbuda.

The forecast is for the storm to swing north toward Florida, as you can see in the National Hurricane Center cone illustration above. A South Florida strike is forecast four or five days from now.

FEMA – the Federal Emergency Management Agency – has information on how to prepare for a hurricane.

Hurricane Irma: Still a Threat

Sunday night, as Hurricane Irma toggles between Category 2 and Category 3, Weather Underground gives us the . . .

Bottom line: Irma is a growing threat to the Leeward Islands, the Greater Antilles, and the Eastern Bahamas. Irma is expected to be drawing closer to the East Coast as a powerful Category 4 hurricane this weekend, but it is still too soon to predict the timing and location of any potential landfall with confidence, and it is still possible Irma will move out to sea.

Do you have a hurricane plan?

  • Yes: Make sure it is ready to go.
  • No: Here are some basics on what you need.

FEMA: Applying for Disaster Assistance

This just came in an email blast from FEMA, along with an accompanying pdf:

FEMA encourages ALL individuals affected by Hurricane Harvey to register for disaster assistance—even if they have flood insurance.

At this time, FEMA is encouraging individuals to register through the website at: There is the ability to register by phone however; as expected there will be wait time when calling 1-800-631-6632 (FEMA).

FEMA’s disaster assistance can provide:
· Temporary housing
· Lodging expenses reimbursement
· Repair
· Replacement
· Permanent or Semi-Permanent Housing Construction

It can also provide the following available:
· Disaster-caused child care expenses
· Disaster-caused medical and dental expenses.
· Disaster-caused funeral and burial expenses.
· Disaster-caused damages to essential household items (room furnishings, appliances); clothing; tools (specialized or protective clothing and equipment) required for your job; necessary educational materials (computers, school books, supplies).
· Fuel for the primary heat source (heating oil, gas).
· Clean-up items (wet/dry vacuum, dehumidifier).
· Disaster-caused damage to an essential vehicle.
· Moving and storage expenses caused by the disaster (moving and storage of personal property while repairs are being made to the primary residence, and returning property to the primary address).
· Other necessary expenses or serious needs as determined by FEMA.
· Other expenses that are authorized by law.

At registration:
· At time of registration and inspection, applicants are required to inform FEMA of all insurance coverage that may be available to them to meet their disaster-caused needs. FEMA does not require denial of insurance coverage before people call 800-621-3362 to register for FEMA assistance.
· Applicants who only have homeowners insurance but have sustained flood damage are not required to submit insurance documentation to receive FEMA Rental Assistance or financial assistance for real or personal property disaster-caused damage.
· Applicants are not required to submit homeowners-insurance documents to FEMA before FEMA will consider their eligibility for financial assistance for any real property damage caused by flood.

For more information on FEMA’s Individual Disaster Assistance, please see

Hurricane Irma: Not Too Soon to Prepare

The tragedy of Hurricane Harvey continues, but Hurricane Irma lurks.

As I write this (1 p.m. Saturday) Irma has sustained winds of 110 mph, which puts it at the top of Category 2 status. It could reach Cat 4 soon, according to the National Weather Service, and its path could take it to the East Coast by mid-week.

If you live along the East Coast – and with Harvey fresh in mind – it really, really makes sense to make sure Irma doesn’t surprise you.

FEMA gives a complete rundown of what to do before and after a storm here.


CoreLogic: Insured Loss (including flood) approaches $10B

CoreLogic released new estimates for losses from Hurricane Harvey:

  • NFIP insured losses – between $6 billion and $9 billion. This implies losses will hit the private reinsurance layer ($4 billion excess $4 billion, of which reinsurers bear about 26 percent).
  • Private flood insurance losses: less than $0.5 billion.
  • Uninsured flood loss: between $18 billion and $27 billion.
  • Insured wind loss: $1 billion to $2 billion.

Insured loss for Texas and Louisiana is between $7.5 billon and $11.5 billion, according to their estimates. This excludes commercial, loss of business and other, broader economic losses, according to the CoreLogic press release.

An estimated 70 percent of flood damage from Hurricane Harvey is not covered by any insurance.


Hurricane Harvey loss estimates roundup as of 9/8/17

Media accounts after catastrophes discuss two types of losses – economic losses and insured losses. Sometimes they do not distinguish between the two. Insured losses are the claim dollars that insurance companies incur from a disaster. Economic losses are the total losses, some of which is covered by insurance and some of which is not. Another way to say it: insured loss + uninsured loss = economic loss.

A hurricane creates another complication. Hurricanes often involve flooding, but flood losses are not covered by a standard homeowners policy. They are covered by a special insurance policy with the federal National Flood Insurance Program. Often insured loss estimates leave out losses from flood insurance.

Here is a rundown of loss estimates, both insured and uninsured. We’ve tried to specify whether flood is included, or if there is another important nuance to the estimate.

We will keep updating estimates as we receive them.


Economic losses

  • 9/6: AIR estimates property losses from wind, flood and storm surge to be $65 billion to $75 billion. Insured losses will be about $13 billion, detailed in the “Insured Losses” section of this post.
  • Global risk modeling and analytics firm Risk Management Solutions (RMS) projects economic losses caused by wind, storm surge, and inland flood from the calamity to be as high as $70 billion to $90 billion. The majority of the overall loss is likely to be from inland flooding in the Houston metropolitan area, RMS said. Update 9/4: RMS puts the NFIP-insured tab at between $7 billion and $10 billion, implying a significant if not total loss to its private market reinsurers, who reinsured a little over $1 billion of the $4 billion excess $4 billion layer.
  • Update 9/1: Moody’s Analytics estimates economic losses to be between $81 billion and $108 billion, Artemis reported.
    • Homes: $45-55 billion
    • Commercial Property: $15-20 billion
    • Vehicles: $8-12 billion
    • Infrastructure: $5-10 billion
    • Total damages: $73-97 billion
    • Lost economic output: $8-11 billion
    • Total cost: $81-$108 billion
  • Moody’s Analytics estimates economic losses in southeast Texas alone to be between $51 billion and $75 billion, Artemis reported. Moody’s Analytics expects property damage to homes and vehicles of $30 billion to $40 billion, $10 billion to $15 billion in flood damages to businesses, $5 billion to $10 billion in infrastructure damage, and $6 billion to $10 billion of lost output.

Insured losses

  • AIR (9/6)
    • $10 billion to the insurance industry, of which $3 billion is wind and storm surge
    • This estimate excludes NFIP losses.
  • Morgan Stanley (9/1):
    • Wind – $2-4 billion
    • Auto – $3-6 billion
    • Commercial Flood – $5-15 billion
    • NFIP – $5-15 billion
  • Karen Clark (9/1):
    • Wind – $2.5 billion
    • Storm surge – $0.5 billion
    • Inland flood – $12.4 billion
  • Catastrophe modeling firm AIR Worldwide, A Verisk Analytics business, estimates that privately insured losses resulting from Hurricane Harvey’s winds and storm surge in Texas will range from $1.2 billion to $2.3 billion.
  • Business Insurance notes that S&P puts a $6 billion industry loss on the event, with primary companies, not reinsurers bearing the brunt. The article also discusses the possibility of flood vs. wind coverage disputes, which were a notable issue after Hurricane Katrina and superstorm Sandy.
  • RMS says industry wind losses will be in the “low billions” in its continually updated blog. Though it hit shore as a Category 4 storm, “Harvey is not primarily about wind.”
  • Update 8/31: CoreLogic estimates
    • NFIP insured losses – between $6 billion and $9 billion. This implies losses will hit the private reinsurance layer ($4 billion excess $4 billion, of which reinsurers bear about 26 percent).
    • Private flood insurance losses: less than $0.5 billion.
    • Uninsured flood loss: between $18 billion and $27 billion.
    • Insured wind loss: $1 billion to $2 billion.

    Insured loss for Texas and Louisiana is between $7.5 billion and $11.5 billion, according to their estimates. This excludes commercial, loss of business and other, broader economic losses, according to the CoreLogic press release.

  • Analytics firm Corelogic estimates privately insured losses from wind damage to range from $1.5 billion to $3 billion.


Working with Your Insurance Claims Professional

Insurance claims professionals often are the second people on the scene after a natural disaster, arriving right after the first responders. In fact, insurers are often considered the economic first responders – because it is insurance that fuels recovery.

After you call in your insurance claim, a claims adjuster will be assigned to you. This professional investigates and evaluates your loss and helps you get insurance funds to settle your claim. While some insurers may use a single adjuster, others may prefer to use certain specialists. That means you could have more than one claims adjuster assigned to assist with filing a claim after a disaster.

For example, you may have someone meet you at your property who is an expert in construction and structural damage. Another expert claims handler could be assigned to help itemize your home’s contents. If you have flood insurance, a flood claim specialist may be called in. And, if your vehicle was damaged by flooding, an auto damage specialist would be assigned.

In every instance, the goal is to pay your claim and provide the financial resources to rebuild. Understanding the insurance claims process will help to ensure that it is a smooth one.

What Does Flood Insurance Cover? What If You Lack Flood Insurance?

The human catastrophe of Hurricane Harvey continues to unfold. The financial challenges, unfortunately, have just begun.

Nationwide over 40 percent of homeowners think the standard homeowners policy covers flood damage from heavy rain, according to Insurance Information Institute public opinion surveys.

It doesn’t. It covers a hurricane’s wind damage, not its floods. This post outlines what a flood insurance policy covers and describes federal help if you lack flood insurance.

And the misconception – homeowners insurance covers flood – has a toll. Other I.I.I. surveys indicate that nationwide only 12 percent of homeowners have flood insurance.

In Harris County, Texas, 15 percent of homes are protected by flood insurance, according to data from the federal National Flood Insurance Program (NFIP) – which sells the overwhelming majority of residential flood policies. (A few private insurers also offer flood insurance.)

The standard NFIP policy covers . . . Continue reading What Does Flood Insurance Cover? What If You Lack Flood Insurance?

The Harvey Rumor: Once More Into the Breach . . .

For heaven’s sake, even is taking on the rumor that Harvey claims have to be filed by Friday:

Texas House Bill 1774 does indeed introduce changes to the way property damage insurance claims are dealt with in the state, but only in the event of a litigated dispute over a claim. Most insurance claims are settled out of court, and so the potential benefit in filing a claim before 1 September 2017 (which is itself marginal) will likely not apply in most cases.

The real benefit would be in filing a lawsuit before 1 September, but for obvious practical reasons, it is extremely unlikely that someone whose home has been destroyed or extensively damaged days earlier, would be in a position to do this.

The law was signed by Governor Greg Abbott on 26 May 2017.

Meanwhile, the National Flood Insurance Program, which will be handling the bulk of claims from Hurricane Harvey, makes these points:

  • Media reports warning of reduced liabilities for insurance companies, late payment penalties, and immediate timelines for filing claims do not pertain to NFIP claims.
  •  National Flood Insurance Policy (NFIP) claims are not subject to state laws. As such, the House Bill 1774 passed in Texas does not affect flood insurance policies or claims from the National Flood Insurance Program
  • NFIP policyholders who have experienced flood damage should file their insurance claims as soon as possible to begin their recovery process, but there is no benefit or penalty in filing before or after September 1, 2017.
  • Visit to learn more about the National Flood Insurance Program and how to file your Flood Insurance claim.