The annual number of insurance claims under NFIP demonstrates the prevalence of natural disasters or flooding issues nationwide – incidents that effect the US housing market and values.
2019 Claims Records and Payments
Note that states within the top 15 amount of claims are not necessarily coastal states, demonstrating how flooding and knowledge of flood status is a nationwide issue of importance.
Consider key points, cited here from a recent report published by Wharton University Risk Management Center:
- “Studies have found that in several places around the nation, homes in the SFHA sell for less than homes outside this zone” even after insurance requirements intending to compensate for myriad potential differences in the properties themselves.
- Several studies have also found that after a flood event, there is a further decline in property values. This drop, however, is often not permanent, with prices rebounding within a decade, sometimes much sooner.
- Declines in property values have also been found outside the SFHA after severe floods occur that cause negative economic impacts, even if specific homes were not themselves damaged. Near misses can also lower property values.”**
As the US government continues work to implement specific risk scores (risk rating 2.0) it will be necessary to determine property-specific risk characteristics that affect losses from floods.
With a glimpse at the nationwide scale of FEMA flood claims and payouts, the importance of granularity, detail and personal evaluation on flood reports and certifications must be a prioritized strategy in addressing this national issue.
** Source: H. Kunreuther, S. Wachter, C. Kousky, M. Lacour-Little (2018) “Flood Risk and The US Housing Market.” https://riskcenter.wharton.upenn.edu/wp-content/uploads/2018/11/Flood_Risk_and_the_U.S_._Housing_Market_10-30_.pdf