Natural Hazard Reports can access risk of uninsured hazards such as earthquakes, storm surge, and sinkholes.
It's more important than ever for lenders and investors to proactively manage their risks when servicing or investing in portfolios with properties that may be affected by natural hazards not covered or limited under a standard homeowner’s policy.
Sinkholes
Over the past five years, Florida insurers have seen a significant spike in sinkhole claims. Newly passed state legislation allows insurers to limit the catastrophic ground collapse coverage in a Florida homeowner’s policy to the principal building unless the insured opts to pay extra for more comprehensive sinkhole coverage. A lender may be concerned that catastrophic ground coverage only covers structural damage and not the land itself - making repairs or rebuilding impossible if the collapsed ground happens to be under or near the damaged structure.
Earthquakes
A California earthquake plus any resulting tsunami or storm surge could force many already strapped homeowners to walk away from their damaged or demolished homes. An Aon Benfield report notes that the 1994 Northridge earthquake in southern California cost the mortgage industry up to $400 million in loan defaults.
Flooding and Storm Surge
Although flood insurance is federally required for mortgage loans secured by properties in Special Flood Hazard Areas (SFHA), studies have shown that 25% to 30% of flood claims come from properties outside SFHAs.
Our Flood Scoring provides an advanced level of risk assessment to those areas along rivers, coastlines, as well as those “protected” by dams or levees.
