The Aftermath: Paying for Hurricane Irma – Wind Versus Flood Damage Insurance and the Complexities of a Rebuild

From east to west, the longest distance across Florida is 361 miles. Before reaching the Florida Keys, Hurricane Irma grew to be over 500 miles wide and Irma’s circumference was greater than the area of Ohio. But the size of Irma paled in comparison to her intensity.

Irma was the most intense hurricane — for the longest length of time  — ever recorded. Irma’s eye wall reached wind speeds of 185 m.p.h. and maintained it for more than 37 hours, a duration that smashed the previous record set by 2013’s Typhoon Haiyan by more than 13 hours. Hurricane Irma “spent 8.5 days as a major hurricane and had a 3.25 day lifetime as a category 5 hurricane – the joint longest lifetime for a storm of this intensity on record. Irma is tied with the 1932 Cuba hurricane in this regard,” reported The Telegraph’s, Patrick Scott.

According to The Guardian, the size of Irma in combination with the wind speeds make Irma, “the most powerful hurricane ever recorded in the North Atlantic.”

Damage from Hurricane Irma

The eye of Hurricane Irma crawled up the western coast of Florida from Monroe and Collier County (Naples) up through Hillsborough County (Tampa) to Levy County and on to the Carolinas leaving billions of dollars of Irma related to flood and wind damage in its wake.

Estimated Irma damages are between $40 and $65 billion in destruction.

Between $20 and $30 billion of the damage left behind by Irma is, “uninsured residential flood loss,” which accounts for 80 percent of the total flood damage. Wind damage could be as high as $19 billion, $15 billion of that being residential loss.

All Irma Destruction Wind and Flood-Related

Hurricane Irma — as do all hurricanes — caused two types of damage: wind-related damage and flood-related damage. Hurricane Irma’s winds destroyed windows, damaged roofs, blow down walls, blew trees down onto overhead power lines, even knocked down homes and buildings.

But, once the hurricane passed an area, the wind damage stopped. Irma’s flood damage, on the other hand, will continue to manifest itself over the coming weeks and months, possibly even years.

Effects of Irma’s Flooding on Homes and Buildings

During the storm and in the hours and days following the hurricane, Irma’s floods washed away the pads beneath foundations, saturated and swelled the ground causing foundations to crack and split, and created slumps and sinkholes that left homes and buildings in Florida and South Carolina off level and plumb. Even many of the homes and buildings that were not completely toppled will have to be torn down and rebuilt in order to meet building code safety standards.

And, the damage from Irma’s floods has just begun.

The wood in buildings and homes that were exposed to Irma’s flood water will begin mold and rot if not exposed to open air and allowed to dry. To prevent flood-related structural failure in buildings and homes from rot and mold — as well as prevent the health problems people experience when exposed to the mold spores that grow on flood-damaged wood — the drywall and siding attached to wood studs must be removed; the studs must be allowed to dry; the wood must then be treated; after all of which, the wall studs must then be re-covered with new materials.

Flood-damaged furniture must be dried and treated as well. Appliances often need to be repaired or replaced following a flood. Floors can be permanently damaged.

Flood Insurance Versus Wind Damage Coverage

As there are two types of hurricane damage, consequently, there are two types of insurance claims Hurricane Irma victims can make: wind and flood. While most homeowner’s insurance plans cover wind damage, it is uncommon for such policies to cover flood damage. The reason, costs.

“There’s a tendency on the part of folks to believe ‘I’ve been paying my premium for 20 years and now I need my policy to step up and cover this,’ ” said Eric D. Miller, an Atlanta attorney who handles insurance disputes. “The reality is, it depends on what’s in your policy.”

Typically, flood damage is more costly than wind damage. And, since flood damage does not stop once the storm passes and the rivers and floodplains dry up, the costs of making repairs can be in the tens of thousands for every flood-damaged home. Furthermore, policies can continue to pour in for years. Because of the costs and complexities of flood damage claims, insurance companies are hesitant to offer flood damage coverage.

When insurance companies do offer flood insurance, it is often very expensive.

Flood Damage, No Flood Insurance

Understanding that private insurers are hesitant to offer flood insurance, the U.S. Government created a flood insurance program in 1968, the National Flood Insurance Program (NFIP). Floridians constitute 35% of all NFIP policies. But, according to PBS, almost 60% of Florida homeowners are without flood insurance, neither private nor NFIP policies.

NFIP Failing to Provide Flood Insurance

Part of the reason Florida homeowners do not buy National Flood Insurance Program coverage is that it is both expensive and poorly run, “The federal government holds a monopoly on primary flood insurance for homeowners and businesses, and the program is debt-ridden and dysfunctional.”

For one the NFIP does not operate like a normal government program. NFIP policyholders are forced to pay higher premiums because NFIP policies are sold to third-party middlemen who then sell the policies to those in need of flood insurance, “More than one-third of premiums are paid to private insurers who sell and service the policies but hold no risk liability,” according to Heritage.org’s Diane Katz. So dysfunctional is the agency run that, “the National Flood Insurance Program (NFIP) owes nearly $25 billion to the U.S. Treasury and taxpayers for covering claims.”

Insurance Companies Unwilling to Irma Victims

To make matters worse, the people in Florida who do have private insurance and are hoping to make a claim might fall prey to insurance company “outs.” In a Forbes Magazine interview, Robert S. Hunter of the Consumer Federation of America explained that many policyholders should expect their insurers to try “wiggling out” of their coverage responsibilities.

One of the methods insurers can be expected to use to put the costs back on the policyholder is the use of “anti-concurrent-causation” clauses in their homeowners policy, “clauses that remove coverage for wind damage if an ‘uninsured flood’ occurs at the same time, says Hunter, a former insurance commissioner for the state of Texas.”

Global Warming Related to Irma and Harvey

Two category five (5) hurricanes hitting the Southern U.S. in the span of a week — an unprecedented turn of events — raises questions with respect to what the future will hold with regard to natural disasters, an atmospheric phenomenon in particular. One thing that isn’t in doubt is the fact that these hurricanes are incredibly costly to individuals, insurance companies, and the government.

Be they the effects of global warming or merely the consequences of enigmatic timing, these storms have prompted some to ask if we are taking the necessary steps to slow our disruption of the atmosphere’s balance. Even others are suggesting a more aggressive approach, “Now Is Absolutely The Time To Politicize Hurricane Irma And Other Natural Disasters,” proclaims Forbes Magazine.