The Federal Emergency Management Agency (FEMA) announced that Hurricane Helene could result in National Flood Insurance Program (NFIP) losses between $3.5 bn and $7 bn, including loss adjustment expenses.
Hurricane Helene caused widespread damage in the southeastern United States in late September 2024, with economic impact estimates ranging from $30.5 bn to $250 bn.
AccuWeather estimated the losses between $225 bn and $250 bn, while CoreLogic’s final figure placed flood and wind losses between $30.5 bn and $47.5 bn. Moody’s Analytics assessed damage at $20 bn to $34 bn, and The Hill reported a potential total exceeding $160 bn.
FEMA’s initial estimate covers claims from 6 states, with Florida being the most affected. By November, over 55,000 flood loss claims were reported to the NFIP, with about $830 mn already paid to policyholders.
The estimate draws from various data points, including policy information, claims reports, payment history, economic conditions, and observations from claim adjusters.
Hurricane Helene impacted over 100,000 buildings from Florida to West Virginia, according to ICEYE. However, private insured losses, primarily from storm surges and floods, remain in the single-digit bn range.
At least 10,000 buildings across Florida, Georgia, South Carolina, North Carolina, Tennessee, Virginia, and West Virginia experienced water levels of five feet or more, ICEYE reported in a Sept. 30 flood bulletin.
FEMA acknowledged that Hurricane Helene is a significant event that might trigger reinsurance payments. However, it will take several months to assess whether the NFIP can collect under its reinsurance agreements.
For fiscal year 2024, FEMA has secured $1.92 bn in reinsurance coverage. If NFIP claim payouts from a covered flood event reach or exceed a specified amount, reinsurers will cover a portion of the flood risk.
NFIP claims are paid through the National Flood Insurance Fund and Reserve Fund, with authorization to borrow an additional $9.9 bn if necessary.
FEMA’s reinsurance program includes a traditional annual arrangement triggered at $7 bn and three capital market placements starting at $6.52 bn in claims. To access the full $1.92 bn of reinsurance coverage, the NFIP must face at least $11.5 bn in flood insurance claim losses from Hurricane Helene.
In North Carolina, the hurricane resulted in at least $53 bn in damages and recovery costs, setting a new state record. Florida also faced severe financial challenges, with the Florida Power & Light Company incurring over $1 bn in hurricane-related expenses.
National Flood Insurance Program had paid $2.2 b in claims for Hurricane Ian an increase of almost 28% from the figure reported by on January 18th, 2023.
US Federal Emergency Management Agency (FEMA) has now provided $896 mn to households impacted by Ian, and $504 million to the State of Florida for emergency response to the storm.
U.S. Small Business Administration has provided $1.47 bn in disaster loans, while the NFIP has now paid $2.2 b in claims to survivors, having received more than 45,800 flood insurance claims.
FEMA reported that $1.2 bn has gone to NFIP policyholders to help their Hurricane Ian recovery, with over 46,000 policyholders having filed claims following the storm’s landfall.
What is the National Flood Insurance Program?
The National Flood Insurance Program (NFIP) is managed by the FEMA and is delivered to the public by a network of more than 50 insurance companies and the NFIP Direct.
Floods can happen anywhere — just one inch of floodwater can cause up to $25,000 in damage. Most homeowners insurance does not cover flood damage.
Flood insurance is a separate policy that can cover buildings, the contents in a building, or both, so it is important to protect your most important financial assets — your home, your business, your possessions.
The NFIP provides flood insurance to property owners, renters and businesses, and having this coverage helps them recover faster when floodwaters recede. The NFIP works with communities required to adopt and enforce floodplain management regulations that help mitigate flooding effects.
Flood insurance is available to anyone living in one of the almost 23,000 participating NFIP communities. Homes and businesses in high-risk flood areas with mortgages from government-backed lenders are required to have flood insurance.
