California’s Recent Storms — Huge Uninsured Losses

Just over a week ago California was hit hard by an atmospheric river. The pouring rains and accompanying flooding and mudslides caused huge economic losses. David Blades is an associate director of industry research and analytics.

“Soaking rains from two different atmospheric rivers have led to repeated flooding events will therefore shine a spotlight on private flood insurance in California,” Blades wrote in his analysis of the damage.

Even though California has the second highest number of people with flood insurance, Blades said just 2% of California’s residents are covered.

CoreLogic said 543,000 single and multifamily homes were damaged in greater Los Angeles. The homes at risk for flash flood damage has an estimated reconstruction value of $258 billion.

AccuWeather said the total damage and economic loss will likely be between $9 billion and $11 billion.

Florida has the most flood insurance through the National Flood Insurance Program (NFIP) but California is second and accounts for 4% of the NFIP flood insurance sales. However, private flood insurance sales still cover half of the state’s flood insurance.

The NFIP says its insurance tops out at $250,000 per residence and that’s not usually close enough to cover most damage. So those in California with NFIP flood insurance are likely underinsured.

Source link: Insurance Journal — https://bit.ly/3OJzN8d