Atlantic hurricane season officially begins on June 1. As COVID-19 sweeps the globe, creating disruption for businesses and homeowners everywhere, the risk hurricanes and associated storm surge pose remains strong with nearly 7.4 million homes in America at risk. CoreLogic® identified the top 15 metros at risk of storm surge, including single- and multifamily residences, accounting for 68.8% of total reconstruction cost value of homes at risk of storm surge on the Gulf and Atlantic coasts in the United States.
Three metros that rank high on the list - Miami, New York City and New Orleans - will be experiencing an increasing rate of mortgage nonpayment as a result of the financial ramifications of the pandemic. This raises additional concerns for response and recovery amidst the economic uncertainty in the season ahead.
“If a hurricane causes significant storm surge damage during a time when mortgage delinquencies are already high, this could result in additional losses for homeowners, lenders and insurers – and ultimately, delay economic recovery for impacted communities,” said Dr. Frank Nothaft, chief economist at CoreLogic.
The effects of COVID-19 during a natural catastrophe response and recovery may prove a daunting challenge. Typically, demand after a natural disaster can surge 15-30%, and last for 6-12 months after. Compounded by a pandemic, reconstruction material and labor could be in particularly short supply and result in higher costs. The use of virtual assessment and claims tools will prove extraordinarily useful in the days ahead.
Especially in these uncertain times, it is important for insurers to:
With a total estimated reconstruction cost value of more than $1.8 trillion at risk of storm surge, taking this knowledge into consideration will allow both homeowners and insurers to identify natural hazard risk early on and prepare accordingly.
Download the full Storm Surge Report to learn more.
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