Majority of Harvey Losses Uninsured

CoreLogic, which provides data and analytics to the insurance as well as the mortgage industry, has issued some preliminary estimates for the residential losses arising out of Hurricane Harvey.  One typically thinks of wind when hearing about hurricanes, but those insured losses in this case were minor in the overall scheme of things, $1 to $2 billion.  No surprise to anyone with a television, in the case of Harvey, water, incredible and historic amounts of it, was the villain.

In the 70-county area in Texas and Louisiana affected, insured losses for homes and contents, including from inland, flash, and storm surge flooding, are estimated to be between $6.5 billion and $9.5 billion. CoreLogic says 98 percent of residential flood insurance in the U.S. is provided through the National Flood Insurance Program (NFIP) administered by FEMA.  That program, which is already in serious financial trouble, is under review by Congress as it will expire on September 30. Only about $0.5 billion of the residential damage is covered by private flood insurance.

Uninsured residential flood losses dwarf the other numbers. CoreLogic estimates them between $18 and $27 billion.  Thus, approximately 70 percent of the water-related losses from Harvey will not be covered by any insurance.

One must expect, with dollar losses at the level CoreLogic predicts, there will be a substantial impact on the housing and housing finance industries as well.