Across the nearly 33 million homes stretching from Texas to Maine that could be impacted by hurricane winds, the combined reconstruction cost would be $10.8 trillion.
More than 32.7 million residential properties are at risk of moderate or severe damage sustained from hurricane-force winds during the 2024 Atlantic hurricane season, according to CoreLogic's “2024 Hurricane Risk Report" released today. Across the nearly 33 million homes stretching from Texas to Maine that could be impacted by hurricane winds, the combined reconstruction cost would be $10.8 trillion, according to CoreLogic.
Additionally, 7.7 million of those properties, with a combined reconstruction cost of $2.3 trillion, have direct or indirect coastal exposure, making them susceptible to storm surge flooding.
An active hurricane season is predicted for 2024, with weather forecasters at Colorado State University (CSU) forecasting 23 named storms, 11 of which will be hurricanes and five will be Category 3 or higher, in an “extremely active" 2024 Atlantic hurricane season.
Meanwhile, the National Oceanic and Atmospheric Administration (NOAA) 2024 hurricane forecast called for 17-25 named storms, 8-13 hurricanes, and 4-7 major hurricanes. NOAA also indicates an 85% chance of 2024 being an above-normal season. The high forecast is due to near-record high ocean temperatures in the Atlantic and the onset of La Nina conditions in the Pacific.
CoreLogic focused on three densely populated metro areas to contextualize the risk: New York, Houston and Miami. New York has more than 3.7 million residential properties at risk of hurricane wind damage, with Houston and Miami each having more than 2 million residential properties at risk of wind damage. These metro areas are also economic powerhouses with significant commercial and financial activity, the CoreLogic report points out. Disruption caused by hurricanes in these cities can have far-reaching economic consequences, not only locally but also nationally and internationally.
The report also uncovered a protection gap between ground-up damage—all losses that would be considered insurable without considering insurance policy deductibles and limits—and gross losses—which accounts for standard policy terms and reflects losses that the insurance industry would cover. CoreLogic found that in the case of a 1% exceedance probability loss, nearly 50% of storm surge flood damage in the Houston area could go uninsured.
In the current hard market, the widening difference between reconstruction costs and insured value for homes means coverage cannot keep up with the rising amount of risk, whether from increasingly common natural disasters or shifts in exposure as people move to disaster-prone areas on the coast.
“Insurance remains one of the most important tools for a resilient society, given the role it plays in recovery. Being able to quantify risk helps insurance companies make informed risk decisions, which is critical in the evolving hurricane landscape," said Maiclaire Bolton Smith, CoreLogic vice president, hazard and risk management. “With the potential for an active hurricane season on the horizon, insurers and homeowners should do everything they can to prepare and mitigate as much risk as possible."
AnneMarie McPherson Spears is IA news editor.
