As we all know, the 2017 Atlantic Hurricane season was an excessively active and extremely destructive season, ranking as the fifth-most active hurricane season since record-keeping began in the mid-19th century. There were several record breaking natural disasters during the 2017 disaster seasons, including hurricanes Harvey, Irma, and Maria, which were followed by wildfires that killed dozens of people and destroyed thousands of homes. These storms combined with other natural disasters, such as mudslides, fires, floods, and storms lead to the realization that Americans need to be better prepared to deal with the repercussions of a disaster.

 Federal disaster aid typically becomes available to declared areas or counties based on the extent of devastation. According to a November article in the Washington Post, the number of Americans who registered for federal disaster aid jumped by 10x this year. By November 2017 more than 4.8 million Americans had registered for disaster aid from the Federal Emergency Management Agency (FEMA). That number surely grew because victims of Harvey initially had a two month window after the storm during which they could register for federal assistance. That deadline had to be extended in order to give survivors some extra time to file their claim, since the filing deadline fell during the Thanksgiving holiday, and the storm knocked out internet and electricity for thousands of residents. The numbers from 2017 blew past years out of the water. Historically, the number of Americans that have registered for disaster aid has varied from 480,000 in 2016 to fewer than 180,000 over the years 2015, 2014, and 2013.

 Not everyone qualifies for aid from FEMA when a disaster strikes. FEMA's objective is to make sure that survivors are in a safe, secure, and functional environment as soon as possible after a disaster. If an insured is not displaced or in an emergent situation they do not qualify for disaster aid. For example, cosmetic damages to a home will not be covered, but if the damage is more substantial and renders the home uninhabitable, FEMA will provide coverage. FEMA is not an insurance company, and it doesn't replace home insurance, instead it fills gaps in home insurance and provides coverage for damages that home insurance generally does not cover. After a flood a home may be full of silt and debris, have mold starting to grow, and be uninhabitable. People in these situations, even if they did not have flood insurance, qualify for disaster aid.

 Some insureds might be under the impression that insurance will save them from having to pay out of pocket for damage that occurs to their property as an effect of the changing climate, but this may not be the case. According to NASA, although the Earth's climate has changed throughout history, the current warming trend is particularly significant because it is more likely a result of human activity than any of the other warming trends in history. There are several indications of this warming trend including the global temperature rise, warming oceans, shrinking ice sheets, glacial retreat, decreased snow cover, sea level rise, and extreme high temperature and intense rainfall events. With these changes to our climate, the landscape to our country is also going to change in the near future. Many of these changes will create damage such as flooding that is not covered under standard homeowner policies. Increased wildfires will increase chances for flooding, mudflows and landslides, again factors not covered by the average policy. Increased global temperature and warming oceans will increase hurricanes and flooding to unprecedented areas. We saw it already this year when sixty inches of rain fell from Hurricane Harvey in Texas alone, destroying the U.S. storm record.

 According to the Climate Science Special Report: Fourth National Climate Assessment, Global Sea Level has risen by about seven to eight inches since 1900; three of those inches have occurred since 1993. Human-caused climate change has made a substantial contribution to the sea level rise since 1900. Based on this trend, it is likely that sea level will rise by half of a foot by 2030 and from 1.00 to 4.3 feet in 2100. Assuming that storm characteristics do not change, the predicted sea level rise will increase the frequency and extent of extreme flooding that is associated with coastal storms, such as hurricanes and nor'easters. A Zillow climate change report states that scientists predict that by the year 2100, almost 300 U.S. cities will lose at least half of their homes, and 36 U.S. cities will be completely lost. As discussed above, the 2017 hurricane season was one of the top ten all-time most active seasons on record, which seems a little like the beginning of the end. If the climate trends continue, insuring beachfront property will soon be much more of a risk than it will be worth. 

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis