Irene And Flooding

As damage estimates start to be reported for Hurricane/Tropical Storm Irene, there is a growing consensus that much of the damage appears to have been caused by flooding rather than wind.

For example, in Vermont where the National Guard has begun airdropping supplies into flooded areas, Governor Peter Shumlin said Irene had resulted in the worst flooding the state has seen in a century.

Given the timing of Hurricane Irene, close to six years since Hurricane Katrina, it’s inevitable that this will lead some to draw comparisons. has an interesting piece on why it’s possible the insurance industry will face similar issues that arose with Hurricane Katrina and its wind vs. water discussion.

While it’s too early to tell just yet what proportion of Irene damage is the result of flooding, it’s important to reiterate that flood damage is excluded under standard homeowners, renters and commercial insurance policies.

Flood insurance is available through the federal government’s National Flood Insurance Program (NFIP) and through some private insurers.

An online article at Knowledge@Wharton has some interesting observations on this issue.

It cites experts at the Wharton Risk Center saying that based on their analyses of NFIP data, it is very likely that many homeowners with damage from Hurricane Irene will not have purchased flood insurance even if they are required to have it.

According to Howard Kunreuther, co-director of Wharton’s Risk Management and Decision Processes Center and cited in the article, it is also unlikely homeowners will have invested in measures to reduce losses from hurricanes.

As Kunreuther states:

Irene provides an opportunity to get the message across that ‘it can happen to me’ so that [people] will decide to undertake protective measures prior to the next disaster rather than after it occurs.†

Check out I.I.I. facts and stats on flooding.

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