More Than 6.5 Million US Homes with Total Reconstruction Value of Nearly $1.5 Trillion at Risk of Hurricane Storm Surge Damage
July 10th, 2014
CoreLogic® today released its 2014 storm surge analysis featuring estimates on both the number and reconstruction value of single-family homes exposed to hurricane-driven storm surge risk within the United States. According to the findings, more than 6.5 million homes along the U.S. Atlantic and Gulf coasts are at risk of storm surge inundation, representing nearly $1.5 trillion in total potential reconstruction costs. More than $986 billion of that risk is concentrated within 15 major metro areas. This exposure could constitute significant risk for homeowners and financial services companies, as many at-risk homes lack protection from insurance coverage.
The analysis examined homes along the coastlines of 19 states and the District of Columbia in the Gulf and Atlantic regions, extending as far west as Texas and as far north as Maine. Florida ranks number one for the highest number of homes at risk of storm surge damage, with nearly 2.5 million homes at various risk levels and $490 billion in total potential exposure to damage. At the local level, the New York metropolitan area, which encompasses northern New Jersey and Long Island as well, contains not only the highest number of homes at risk for potential storm surge damage (687,412), but also the highest total reconstruction value of homes exposed, at more than $251 billion.
To enhance accuracy, the 2014 CoreLogic storm surge analysis has been expanded from prior years' reports to encompass additional categories of single-family residential structures including mobile homes, duplexes, manufactured homes and cabins, among other non-traditional home types. The addition of these categories, along with new construction, contributed to a higher number of total homes identified within potential surge areas. The values represent estimates of reconstruction costs, taking into account labor and materials, and are based on 100-percent or total destruction of the residential structure. Depending upon the amount of surge water from a given storm, there may be less than 100 percent damage to the residence, which would result in a lower realized reconstruction cost.
While scientific predictions are pointing to lower-than-normal storm activity for 2014, the risk of significant damage to homes is a constant threat. "Though the 2013 hurricane season will be remembered for the fact that no storms made landfall along the U.S. coast, this reprieve from hurricane-related damage should not lead to complacency in preparing for future storms and the potential life-threatening conditions they can bring," said Dr. Thomas Jeffery, senior hazard scientist for CoreLogic Spatial Solutions. "This year's season is projected to be slightly below normal in hurricane activity, but the early arrival of Hurricane Arthur on July 3 is an important reminder that even a low-category hurricane or strong tropical storm can create powerful riptides, modest flooding and cause significant destruction of property."
The 2014 analysis shows that total exposure varies significantly from state to state given differences in population, trends in residential development, geographic risk factors, length of coastline and other distinguishing factors. Florida and Texas, for example, are within the top five states for number of properties at risk primarily because of their extensive coastlines (Table 3). Louisiana and New Jersey, on the other hand, have a smaller coastal area overall, yet are included in the top five list as a result of relatively low elevation that allows storm surge inundation to extend farther inland and affect more homes.
The concepts in this analysis also complement Federal Emergency Management Agency (FEMA) flood zone information to provide a snapshot of potential damage exposure at the property level, as many properties located outside designated FEMA flood zones are still at risk for storm surge damage. The standard FEMA flood zones are designed to identify areas at risk for both freshwater flooding as well as storm surge based on the likelihood of either a 100-year or a 500-year flood event. They do not differentiate risk based on storm severity, and as a result, do not effectively define the total extent of the risk possible along coastal areas.
To illustrate varying degrees of flood risk exposure, Table 6 compares homes that are not located within FEMA 100-year floodplains against the number of homes located in surge inundation zones, as well as those located in both surge and FEMA Special Flood Hazard Areas (SFHA). Homeowners who live outside the FEMA flood zones typically do not carry flood insurance, given that there is no mandate to do so, and therefore may not be aware of the potential risk storm surge poses to their properties. Among select major metro areas, Virginia Beach-Norfolk-Newport News, VA-NC has the highest percentage of homes (86 percent) at risk of storm surge, but not designated in a FEMA flood zone. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD and Jacksonville, Fla. also top the list at 85 percent and 76 percent, respectively. Even in New York-Newark-Jersey City, NY-NJ-PA, 68 percent of homeowners at risk of flood or surge inundation would not be required to carry flood insurance because they are not located within a designated FEMA 100-year floodplain.
Additional findings in the CoreLogic storm surge analysis include:
- The five states with the highest total number of properties at risk include: Florida (2,488,277), Louisiana (738,165), New York (466,919), New Jersey (445,928) and Texas (434,421).
- The five states (including the District of Columbia) with the lowest total number of properties at risk include: the District of Columbia (3,895), New Hampshire (10,853), Maine (23,439), Rhode Island (26,558) and Delaware (48,534).
- The five states with the highest value of reconstruction costs for homes at risk include: Florida ($490,403,653,377), New York ($182,474,294,695), Louisiana ($161,062,467,382) New Jersey ($134,194,963,314) and Virginia ($92,001,482,217).
- The five states with the lowest value of reconstruction costs for homes at risk include: District of Columbia ($394,437,173), New Hampshire ($2,649,086,294), Maine ($6,629,856,369), Rhode Island ($7,389,384,876) and Alabama ($10,333,310,460).
- The reconstruction value of the homes exposed to storm surge damage in the Gulf is much less than the reconstruction value of homes in the Atlantic region, as indicated in Table 2. The total reconstruction cost value of homes along the Atlantic coast is nearly $951 billion, which is approximately double the value of at-risk properties in the Gulf region at just over $545 billion.
CoreLogic releases storm surge data to enhance understanding of the risk that hurricane-driven storm surge poses to homes, institutions and economies that are prone to tropical storms. Fully understanding the number of homes and financial impact of sustaining storm surge damage is critically important for financial institutions, corporate entities and local governments to make better informed risk management decisions. Storm surge data is highly useful for insurance providers and financial services companies, as it enhances the understanding of potential exposure to water damage for homes, including those that do not fall within the designated FEMA flood zones. Recent regulatory guidelines are compelling financial services companies subject to federal stress testing to understand under-insured or uninsured risks like storm surge flooding, since exposed properties have a significant risk for default following an event. More granular insight into storm surge impact is necessary for preparation and mitigation efforts that can help reduce the amount of damage and loss, and also improve safety and disaster response.
Table 1: Residential Exposure by Storm Category for the Entire U.S.
Storm Surge Risk Level
Total Homes Potentially Affected Total Estimated Reconstruction Cost (U.S. dollars)
Extreme (Affected by a Category 1-5 storm)
Very High (Category 2-5)
High (Category 3-5)
Moderate (Category 4-5)
Low (Category 5)
Table 2: Residential Exposure by Coastal Region
Region Atlantic Coast Homes (Potential) Atlantic Coast Structure Damage Exposure (Estimated) Gulf Coast Homes (Potential) Gulf Coast Structure Damage Exposure (Estimated)
Table 3: State Table (Ranked by Number of Homes at Risk)
|20||District of Columbia||N/A||1||759||3,135||N/A||3,895|
Table 4: Reconstruction Value of Properties at Risk by State
Table 5: Storm Surge Risk for Top 15 Metro Areas
|Rank||Metropolitan Area||Total Properties Potentially Affected by All Categories of Hurricane||Total Reconstruction Value|
|1||New York, NY||687,412||$251,038,846,466|
|4||Virginia Beach, NC||394,705||$87,178,838,156|
|5||New Orleans, LA||381,149||$85,679,653,561|
|6||Cape Coral, FL||299,508||$60,430,683,073|
|15||Myrtle Beach, NC||104,707||$19,373,709,040|
Table 6: Storm Surge Inundation vs. Freshwater Flooding for Select Major Metro Areas*
|CBSA||Total Homes Exposed to Flood or Surge Inundation||Total Homes in Both a SFHA and a Surge Zone||% of Homes in Both a SFHA and a Surge Zone||Total Homes Located Only in a FEMA SFHA||% of Homes Located Only in a FEMA SFHA||Total Homes Located Only in a Surge Zone||% of Homes Located Only in a Surge Zone|
|Virginia Beach-Norfolk-Newport News, VA-NC||395,584||55,115||13.9%||879||0.2%||339,590||86%|
|Deltona-Daytona Beach-Ormond Beach, FL||113,172||19,857||17.5%||10,858||9.6%||82,457||73%|
|New York-Newark-Jersey City, NY-NJ-PA||725,020||192,202||26.5%||37,608||5.2%||495,210||68%|
|North Port-Sarasota-Bradenton, FL||230,344||83,795||36.4%||2,523||1.1%||144,026||63%|
|Cape Coral-Fort Myers, FL||300,988||140,736||46.8%||1,480||0.5%||158,772||53%|
|Tampa-St. Petersburg-Clearwater, FL||481,525||197,875||41.1%||36,760||7.6%||246,890||51%|
|Houston-The Woodlands-Sugar Land, TX||338,090||51,114||15.1%||121,210||35.9%||165,766||49%|
|Baton Rouge, LA||127,719||29,864||23.4%||37,228||29.1%||60,627||48%|
|New Orleans-Metairie, LA||383,991||211,871||55.2%||2,842||0.7%||169,278||44%|
|Naples-Immokalee-Marco Island, FL||180,489||104,514||57.9%||2,838||1.6%||73,137||41%|
|Miami-Fort Lauderdale-West Palm Beach, FL||1,191,134||356,400||29.9%||628,724||52.8%||206,010||17%|
*Additional CBSA data, market rankings, regional, state and local-level maps are available upon request.
The data used for the 2014 CoreLogic storm surge analysis to determine the number of homes at risk of storm surge inundation, as well as the estimated reconstruction value of these residential structures, has been expanded. Data for 10 additional categories under the single-family residence classification has been added to include mobile homes, duplexes, cabins and manufactured homes, among others. These new categories, which were not previously captured, allow for an improved and more complete database, and thus account for the increase in the number of single-family residences identified as at risk.
In addition, the estimation of property values CoreLogic uses for single-family residences now includes Marshall & Swift/Boeckh™ (MSB) reconstruction valuation data. CoreLogic acquired MSB in late March 2014, and new valuations in this report are derived from the MSB reconstruction cost estimates rather than market valuation data. Reconstruction cost estimates more accurately reflect the actual cost of damage or destruction of residential buildings that would occur from hurricane-driven storm surge since they include the cost of materials and labor needed to rebuild, and also factor in geographical pricing differences. Actual land values are not included in the estimates. The values are based on 100-percent or total destruction of the residential structure. Depending upon the amount of surge water from a given storm, there may be less than 100 percent damage to the residence, which would result in a lower realized reconstruction cost. In the event that reconstruction costs were not available, CoreLogic Reconstruction Cost Industry Benchmark averages were used to calculate property-level values.
The updated data CoreLogic used to determine the number of homes located in storm surge risk areas and their associated values is intended to provide a more complete and accurate interpretation of the threat of hurricane-driven flooding across the Gulf and Atlantic Coasts of the U.S. While the number of homes and values can regularly fluctuate, this more broadly defined and comprehensive data accurately represents potential damage posed by storm surge.
Storm surge is triggered primarily by the high winds and low pressure associated with hurricanes, which cause water to amass inside a storm as it moves across the ocean before releasing as a powerful rush overland when the hurricane moves onshore. In addition to the property damage and potential lives lost to flooding, the speed and force associated with storm surge waves can significantly increase geographic and economic impact in hurricane disaster areas.
To learn more about hurricane-driven storm surge, visit: http://www.corelogic.com/about-us/researchtrends/storm-surge-report.aspx