Hurricane Harvey's Devastation: Over 70% Uninsured Against Flood Damages
The latest preliminary data from real estate analysis firm CoreLogic predicts flood damages to homes in southeast Texas and southwest Louisiana totaling between 25 to 37 billion USD. However, only 6.5 to 9.5 billion USD of this damage will be covered by insurance companies.
This projection isn't entirely surprising. A small fraction of Harvey-affected homes had flood insurance through the National Flood Insurance Program (NFIP), a federal program that virtually offers the sole high-water protection for property owners.
Standard homeowner's insurance does cover damage from powerful winds related to hurricanes, but not damages from rain or flooding. Many Harvey-damaged homes are located in areas with moderate flooding risks.
For Harvey victims without insurance backing, this presents a daunting challenge. In recent days, hundreds have turned to online crowdfunding platforms for aid.
Related: Businesses contribute over 113 million USD for Harvey relief efforts
Initially, CoreLogic's estimated total damage appears to align with its 25 August "worst-case scenario" of 40 billion USD, just hours before Harvey hit land.
However, this model assumes Harvey would land as a Category 3 hurricane on Texas' coast, destroying over 200,000 homes. It also considers storm surge (overwhelming of land due to rising water levels, apart from rainfall) and reconstruction costs, but excludes wind or storm surge damages.
Harvey chose an unexpected route. As it made landfall last Friday in Rockport, Texas, as a Category 4 hurricane, it weakened to a tropical storm by mid-Saturday. When it reached Houston, it refused to move, bringing unprecedented rainfall of over 50 inches to certain city areas and causing catastrophic floods that then spread to Louisiana's coast.
CoreLogic also predicted wind damage could add another 1 to 2 billion USD in damage, with most of it covered by insurers.
Contributions by Chris Isidore of CNNMoney.
