As Floridians recover from Ian, most homeowners in state do without flood insurance

Many Florida homeowners begin the arduous recovery from Hurricane Ian they will do so without the benefit of flood insurance, forcing them to either rebuild with scarce resources or make difficult choices about relocation.

Ian was among the most destructive storms to hit the U.S. Early estimates of residential and commercial losses range from $28 billion to $47 billion, according to real estate data firm CoreLogic, while other forecasts have put the price to more than $60 billion. The storm’s powerful eyewall was unusually large, measuring 40 miles in diameter, and the storm surge peaked at 12 feet.

“Since Andrew, Ian looks very likely to be the biggest loss that Florida has experienced,” David Smith, senior leader of science and analytics at CoreLogic, said in a recent presentation.

Hurricane Andrew hit in 1992 and was the costliest hurricane in US history until Katrina in 2005, which devastated the Louisiana coast and the city of New Orleans.

Since 1992, Florida’s population has grown more than 60%, putting more residents at risk. However, fewer than 1 in 5 of the state’s 10 million homes have flood insurance, according to the Insurance Information Institute. Without insurance, people in flooded areas must turn to the Federal Emergency Management Administration for immediate grants, which often top out at $30,000 or $35,000 — a fraction of what they might need to rebuild or relocate.

The median home in Florida sells for $395,000, according to Redfin. Meanwhile, just one inch of flooding can cause $25,000 in damage, according to the National Flood Insurance Program.

Hurricane Ian leaves a path of destruction in Southwest Florida


Although floods are the most common natural disaster in America, most homeowners do not have flood coverage, with the poorest less likely to have insurance. The typical flood insurance policy runs about $700 a year, while the average payout exceeds $50,000, according to the most recent FEMA data.

“Flood insurance is not equally distributed across high-risk areas—homeowners who are wealthier and in areas with white areas are more likely to have coverage,” said Max Besbris, assistant professor of sociology at the University of Wisconsin-Madison and co-author of a recent book on the aftermath of Hurricane Harvey.

“Communication failed”

Nationally, surveys show that between a quarter and a third of Americans have flood insurance. Those who don’t have a policy usually do so because they can’t afford it or don’t know they need it. When Besbris and fellow sociologist Anna Rhodes interviewed flood victims from Harvey, they found that “most people didn’t know their level of vulnerability,” Besbris told CBS MoneyWatch.

“They didn’t think the flood waters could get as high as they did. The last storm they had was Imelda in 1979 — that was the benchmark people were working with,” Besbris told CBS MoneyWatch.

“This is a communication failure on the part of FEMA, local municipalities and governments to tell their residents that there is an increasing risk of flooding, especially as climate change makes flooding more severe.”

Unlike auto insurance, which is required by law, flood insurance is optional for most homeowners unless they live in a FEMA-designated flood zone. But as climate change makes flooding more frequent and more severe, these zones are outdated in many parts of the country.

Today, about 180,000 homes on Florida’s storm-ravaged Gulf Coast are at significant risk of flooding, but are outside FEMA’s 100-year flood zone, according to the nonprofit First Street Foundation. Statewide, that number rises to 350,000.

Prices are going up

Not only are few homeowners covered by flood insurance, but the numbers are skewed in the wrong direction. Since the National Flood Insurance Program began raising some of its premiums last year to account for increased flood risk, hundreds of thousands of people have dropped out of federally backed insurance policies.

In Florida, about 48,000 fewer households have federal flood insurance this year than in 2021, according to FEMA data. The trend suggests affordability remains a concern, particularly for homeowners who are poorer or live on fixed incomes, as many Floridians do.

“Increasing the cost of flood insurance means that less advantaged people will stop buying coverage,” Besbris said. “When these things like Ian happen – and they will happen more and more often – whole communities, apart from individual households, are not going to have clear paths to recovery.”

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