Ida’s Gulf Coast Flood Victims More Likely To Be Insured

About 50% were covered against flooding, compared with 30% for past storms

BARATARIA, LOUISIANA - AUGUST 31: The Maldonado travel by boat to their home after it flooded during Hurricane Ida on August 31, 2021 in Barataria, Louisiana. "I've lost everything in my trailer because of the hurricane. I've lost everything, my family has lost everything and we're now trying to find help. We all live in this area and now its all gone," said Fusto Maldonado when asked about the storm's effect. Power is out throughout New Orleans and the surrounding area. Ida made landfall as a Category 4 hurricane on August 29 in Louisiana and brought flooding and wind damage along the Gulf Coast.
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Hurricane Ida caused an estimated $27 billion to $40 billion of damage to the Gulf Coast, but there was a silver lining for some homeowners in its path: They were much more likely to be covered by flood insurance than homeowners caught in past hurricanes, a new report shows.

  • About 50% of homeowners in the Gulf Coast who suffered flooding from Hurricane Ida were insured, compared with 30% during Hurricane Harvey and previous storms, one estimate says.
  • Floods can be financially devastating—the average flood insurance claim from Harvey was $116,823.
  • In total, Ida caused an estimated $27 billion to $40 billion of damage to the Gulf Coast.

As many as 50% of homes that suffered flood damage had flood insurance, real estate data company CoreLogic said in a report Wednesday. That’s a significant improvement over the 30% insurance rate for homeowners who were flooded when Hurricane Harvey struck Texas and Louisiana in 2017, which was roughly in line with rates for other previous storms. The company’s estimate is based on computer models incorporating storm surge, flood data, and property information. Ida caused anywhere from $5 billion to $8 billion in residential flood damage—both from storm surge and rainfall—and about $2.5 billion to $3.5 billion of that was insured, CoreLogic said. 

Flood insurance is especially important for disaster-stricken homeowners because the damage from floods can be extremely expensive to fix, and it is usually not covered by homeowners insurance policies. People living in areas at high risk for flooding may be required to buy flood insurance—usually through the federal National Flood Insurance Program—but it’s optional in other places, where homeowners risk significant losses if they don’t get it. While CoreLogic has yet to estimate Ida’s impact on individual homeowners, the average NFIP claim for Harvey was $116,823, the Congressional Research Service estimated.

“It’s very encouraging that we’re seeing an increase in the amount of damage that is covered by flood insurance,” said Tom Larsen, principal of insurance solutions at CoreLogic.

CoreLogic monitored Ida as it swept ashore Sunday in Port Fourchon, Louisiana, with sustained winds of 150 mph, blowing off roofs, knocking over power lines and trees, and buffeting around 341,000 homes with hurricane-force winds, according to CoreLogic’s computer models. In some coastal areas, flood waters washed away homes, turning them into battering rams that demolished neighboring buildings. (CoreLogic said it was preparing a separate report on the flooding Ida caused later in the Northeast.)

Why more homeowners were insured against such catastrophes than they were in 2017 is a bit of a puzzle, Larsen said. It could be because Ida’s floodwaters were mostly within known flood zones, where homeowners were more likely to have already purchased insurance. It’s also possible that the destruction caused by Harvey was so severe, homeowners in the region became more likely to protect themselves with flood insurance. 

“The psychology of insurance buying is that we buy for the last event,” he said.

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