Congress recently approved an extension for the National Flood Insurance Program. Rather than expiring this past July, the program will run through 2017. Florida residents welcomed that decision, particularly since hurricane season was underway, and they did not want to be left without the needed property insurance should any hurricane damage their homes.
Most Floridians recall that NFIP funds were wiped out by Hurricane Katrina in 2005, but the federal government bailout has extended the program for five more years. This was just one small mitigating factor early this week as Tropical Storm Isaac threatened to jeopardize lives and property in the Gulf Coast region -- and property insurance analysts estimated $36 billion in residential property was at risk.
As Tropical Storm Isaac hit the Florida Keys earlier this week, forecasters predicted it would turn into a Category 1 or Category 2 hurricane as it made its way up the Gulf Coast. Their concern was that the storm surges and flooding would lead to tremendous losses, just in time for the seventh anniversary of Hurricane Katrina. The forecasters believed, however, that Florida could fare better than other Gulf Coast states, as the path of the storm took it farther west.
Data analysts tracking the storm warned that the greatest risk to life and property is from storm surges, the walls of water that are pushed forward by a hurricane as it approaches land. Hurricane Katrina had surges that exceeded 25 feet. Property owners have no way to defend themselves against the surges and areas that are below sea level could be the most affected by Isaac.
Those were the predictions. We'll discuss how accurate they were in our next post.
Source: Reuters, "Isaac storm surge could put $36 billion worth of homes at risk," Ben Berkowitz, Aug. 27, 2012