A week after Hurricane Helene devastated the Southeastern U.S., homeowners are left grappling with the overwhelming costs of flood damage from one of the deadliest storms in recent history.
The Category 4 hurricane, which made landfall on Florida’s Gulf Coast on September 26, unleashed trillions of gallons of water across multiple states, creating a catastrophic path of destruction that stretches hundreds of miles inland. Over 200 fatalities have been reported, making it the deadliest hurricane to strike the mainland U.S. since Hurricane Katrina, as per the National Hurricane Center.
Western North Carolina, particularly the Asheville area, suffered significant damage, with floods destroying buildings, roads, utilities, and land—an event nobody anticipated. Inland regions in Georgia and Tennessee also experienced devastating impacts.
The Oak Forest neighborhood in Asheville, known for its towering trees and 1960s ranch-style homes, was hit hard on September 27, as remnants of Helene left many trees toppled, some on homes. Julianne Johnson recalled rushing to assist her son when a giant oak fell across her yard, causing damage to her metal porch and affecting her roof. Johnson experienced flooding in her basement, exacerbated by disrupted communication; she couldn’t file her home insurance claim until four days post-storm.
While roof and tree damage are often covered by standard home insurance, many homeowners, including Johnson, lack flood insurance, leaving them uncertain about how to cover those costs. Flood damage falls outside typical home insurance policies, which do not include coverage for such incidents, despite experts highlighting that floods can occur anywhere it rains.
The National Flood Insurance Program (NFIP), managed by the Federal Emergency Management Agency (FEMA), serves as the primary insurer for residential flood coverage, especially after private insurers withdrew from high-risk areas decades ago. North Carolina currently has around 129,933 NFIP policies active, although the majority are concentrated along the coast rather than in the mountainous regions most affected by Helene. In contrast, Florida holds approximately 1.7 million flood insurance policies statewide.
Charlotte Hicks, a flood insurance authority in North Carolina, noted that many survivors of Helene may never fully recover. For those without flood insurance, rebuilding may hinge on charitable help, with some facing dire financial challenges. “There will absolutely be people who will be financially devastated by this event. It’s heartbreaking,” Hicks stated.
The storm’s aftermath has heightened concerns regarding housing stability for some families, with the potential for foreclosure or bankruptcy looming. Mudslides have even claimed land where homes once stood, contributing to the extensive destruction.
Interestingly, Hurricane Helene’s impacts could be manageable for the private home insurance sector, primarily because these policies cover wind damage but not water-related destruction. This development offers a respite for insurance companies already grappling with losses from other severe climate events. Florida, in particular, has seen a contracting private insurance market due to increasing climate risks, leading to the state-backed Citizens Property Insurance Corporation becoming the largest home insurer in the state.
According to industry experts, Helene’s projected insurer losses could range from $5 billion to $8 billion, significantly lower than the estimated $50 billion in insured losses from Hurricane Ian in September 2022. Alarmingly, less than 1% of the inland areas that sustained the most severe flood damage had flood insurance protection.
Insurance gaps in flood coverage are a widespread concern across the United States, with only about 6% of homeowners being insured against floods, primarily in coastal regions. Amy Bach, executive director of a consumer advocacy group, highlighted the disillusionment residents face in the wake of the storm, stating that FEMA’s assistance cannot match the financial support private insurance companies are expected to provide.
This week, FEMA confirmed its capacity to address immediate needs but cautioned about insufficient funding to sustain efforts throughout the hurricane season, which lasts from June 1 to November 30, with September and October being peak months for hurricanes.
Even with flood insurance, challenges remain as FEMA limits coverage to $250,000 for single-family homes and $100,000 for contents. Advocates call for heightened awareness among homeowners regarding their insurance policies, advocating for a national disaster insurance program that mirrors the Affordable Care Act’s impact on health insurance.
In response to past disasters like Hurricane Floyd in 1999, North Carolina instituted mandatory training for insurance agents on flood insurance to better inform clients about risks and available policies. Clear disclosures in home insurance policies detailing exclusions for flood damage are also a requirement.
“You can’t prevent natural disasters, but assuming it won’t happen again would be dangerous,” Hicks concluded, stressing the need for greater awareness of flooding risks.
