Floods and fires are serious disasters, but insurance risk may be climate change?s biggest economic impact As additional rainfall and new stormwater surges from Hurricane Harvey hit Texas, the country continues to rally around hard-hit communities just beginning to comprehend the impact of the unprecedented flood. Cities will rebuild and return, promise local and national leaders.
But as Harvey?s full significance comes into focus over the next weeks and months, flood insurance, one of the pillars of local rebuilding efforts, will be in the spotlight. Early estimates suggest the losses may hit $10 billion to $20 billion, making it one of the 10 costliest hurricanes in U.S. history.
By September 30, Congress must reauthorize the National Flood Insurance Program (NFIP), a crucial government program that helps pay for and provide policies for millions of properties in at-risk areas across the country. The impact of Harvey on the NFIP is yet unknown, but is clearly expected to be sizable; in Harris County, Texas, the flood program holds more than 240,000 policies, representing more than $60 billion in coverage, according to AIR Worldwide. In other words, just as the nation begins to figure out how to pay for one of the costliest natural disasters in its history, the insurance program that functions as a backstop for hundreds of thousands of affected properties will be up for debate and renewal.
Battered by recent disasters, hurricanes, and floods, the NFIP is currentl...