This post is part of a series sponsored by CoreLogic.
Total Reconstruction Cost Value is More Than $1.5 Trillion
It’s no surprise that residential homes in the U.S. located along the Atlantic and Gulf coasts are susceptible to damage from storms and hurricanes, and data shows that potential damage from a single hurricane could exceed well beyond a billion dollars. However, the risk of storm surge flooding is not uniform along the coast and certainly not limited to states with a reputation of more frequent hurricane activity, such as Florida or Louisiana. In fact, a lower category storm that makes landfall in a highly populated area can be more catastrophic than a Category 5 storm that hits a small, sparsely populated town or undeveloped coastline.
The 2017 CoreLogic Storm Surge Report, reveals that nearly 6.9 million homes along both the Atlantic and Gulf coasts of the U.S. are at potential risk of hurricane storm surge damage with an estimated total reconstruction cost value (RCV) of more than $1.5 trillion (Figure 1).
Even though early storm predictions indicate the 2017 hurricane season will see fewer storms than both 2016 and the 30-year average, the National Oceanic and Atmospheric Administration (NOAA) still predicts 12 total storms for this year, six of which are predicted to develop into hurricanes, and three of those are predicted to be Category 3 or higher. Regardless of the number of storms, location is very important when considering the effect that storm surge will have on total loss from any event.
At the state level, Texas and Florida – which have the longest coastal areas – consistently rank highly for homes at risk. Again this year, as in previous years, Florida ranks first with just under 2.8 million at-risk homes, and Texas ranks third with 536,000 at-risk homes, while Louisiana ranks 2nd with 808,000 at-risk homes (Figure 2).
*The Low risk category refers to Category 5 hurricanes which are not common along the northeastern Atlantic Coast. States in that region are designated as N/A for this category due to the extremely low probability of a Category 5 storm affecting that area.
At the metro level, the Miami Core Based Statistical Area (CBSA), which includes Fort Lauderdale and West Palm Beach, has the most homes at risk of storm surge damage totaling almost 785,000 with an RCV of $143 billion. By comparison, the New York City CBSA has slightly fewer homes at risk at 723,000, but a significantly higher RCV totaling $264 billion due to the greater home values and high construction costs in this area. When analyzing storm surge risk at the local level, 15 CBSAs account for 67.3 percent of the total 6.9 million at-risk homes and 68.6 percent of the total $1.56 trillion RCV (Figure 3). This disproportionate distribution of risk confirms that the location of hurricanes that make landfall is often a more important factor than the number of storms that may occur during the year.
This year’s report also includes probabilistic loss analysis on historical storms, focusing on Florida hurricanes beginning in 1900 and, specifically, Hurricane Matthew in 2016. Property replacement value data from CoreLogic was analyzed with the high resolution North Atlantic Hurricane model to provide risk perspectives from historical hurricane events should they occur today. Of the 97 catastrophic hurricanes in Florida since 1900, the top 25 based on storm intensity, financial damage and impacted properties are listed in Figure 4. Hurricane Matthew, the most recent to hit Florida in October 2016, ranks 19th among historical storm surge events. The 13th hurricane of 1944 (before hurricanes were given actual names) tops the list as the most destructive, causing $15 billion worth of damage on 471,000 homes in today’s terms.