Californians know fires and earthquakes; storms, not so much. So when Tropical Storm Hilary flooded Southern California in what was usually a bone-dry August, it showed just how exposed homeowners are to the growing financial risk from unpredictable flooding caused by climate.
Most homeowner’s insurance policies do not cover flooding and less than 2% of California households have flood insurance, despite increasingly powerful winter storms that overflow rivers and streams. leve, beating the beach and soaking in the desert. As Hilary, the first tropical storm to hit the Golden State in 84 years, passed through Palm Springs on Aug. 20, it dumped nearly a year’s worth of rain in one day on the desert community. east of Los Angeles, causing widespread flooding in the Coachella Valley.
“No one is safe from flooding in California right now,” said Firas Saleh, director of product management at risk modeler Moody’s RMS. Even communities far from rivers and coasts face increasing risks. “Rain can happen anywhere,” added Saleh, who analyzes climate-related flood risk. “That means these areas are more vulnerable to flooding due to changes in the frequency and intensity of rainfall.”
Here’s what to know about flood risk and options to reduce exposure.
Why so few Californians have flood insurance
When you buy a home, the lender will check maps published by the Federal Emergency Management (FEMA) to determine if the property sits in a flood zone designated as high risk by the government. If so, the lender may require you to obtain coverage through FEMA’s National Flood Insurance Program or from a private insurer. If you have a federally insured loan and live in a hazard zone, flood insurance is required. Your home may also be located in a FEMA-identified low-risk flood zone.
But because of California’s exorbitant home prices and rising insurance rates, many homeowners without flood insurance are not required to purchase policies, according to Saleh. Even those who need to buy flood insurance to get a mortgage can be canceled in the next few years, betting their lender won’t notice. California’s record-breaking, three-year drought, which ended only last winter with record-breaking storms, may also make flooding seem like a distant threat.
The National Flood Insurance Program writes 89% of residential policies in California although private insurance accounts for 42% of premiums paid, according to Moody’s RMS, due to the higher value of those policies. But federal coverage rates are falling, with a 5% reduction nationwide since 2021. “We’ve seen a lot of cancellations in the last two years,” Saleh said.
Among the nearly 24,000 homes in Palm Springs, only 167 were covered by federal flood insurance as of July 31, according to FEMA data. In the Northern California coastal town of Capitola, which saw its harbor washed away and homes flooded last winter, only 66 of 4,656 households have federal flood insurance.
Read More: Hurricane Idalia Exposes Florida’s Dangerous Flood Insurance Gap
Michael Soller, a deputy commissioner of the California Department of Insurance, said in an email that the state is “working to increase consumer awareness of flood insurance protection gaps.”
Flood maps do not reflect current climate risks
FEMA taps into historical, meteorological and topographic data to determine the likelihood of flooding from waterways as well as from storm surges in coastal areas.
But the rapid pace of climate change is outstripping assumptions. That’s especially true in California, which has fluctuated between severe droughts and floods over the past decade. A tropical storm hitting California dead in a hot and dry summer is probably not on FEMA’s flood-probability bingo card.
“We’ve seen across the country that FEMA flood maps are not necessarily the best predictors of where flooding will occur,” said Kristina Hill, an associate professor at the University of California at Berkeley who studies rising flood levels. sea and other climate effects on urban hydrology. “So what we’re seeing in California is that it’s not necessarily the areas that are designated as flood-vulnerable that are the most flood-vulnerable.”
In times of drought, for example, the soil becomes compacted and less able to absorb water from heavy rains. The same is true for the land that has been stripped of vegetation due to the growing fires in California. When it rains, storms are stronger and more frequent. Between December 2022 and March 2023, a dozen moisture-filled atmospheric rivers rolled into the state. Such heavy and sustained downpours can cause flash flooding far from any waterways, severe storm drains and other 20th century infrastructure built for a climate that no longer exists. . That can also cause water levels to rise, causing more flooding as groundwater invades homes from below.
More rain means more snow in California’s mountains — 60 feet of snow fell in some ranges this past winter — raising flood threats as the snowpack melts amid rising temperatures. In the state’s Central Valley this year, meltwater and rain have filled the long-flooded Tulare Lake basin, submerging nearly 180 square miles of farmland.
“Flood maps have been updated with better modeling, but they haven’t been updated for things like sea level rise, rising groundwater near the coasts and more powerful storms. -rain,” said Hill.
Saleh says some flood maps are 15 years old and so do not account for subsequent urbanization that exacerbates flooding as open space is paved.
You can check if your home is in a government-designated flood zone by entering your address on the FEMA website. Any homeowner can purchase federal flood insurance as long as their community participates in FEMA’s National Flood Insurance Program. The agency lists the communities on its website. You must purchase a federal policy through an insurance broker and the site lists state providers. Renters can also obtain flood insurance to cover the loss of personal possessions. “FEMA recommends that everyone purchase flood insurance regardless of their flood zone,” the agency said.
Annual flood insurance premiums run around $900. However, be warned that federal flood insurance only takes effect 30 days after purchase and caps payments at $250,000 for damage to your home and $100,000 for its contents. That’s not far from a state like California, where the median home price is nearly $800,000 and exceeds $1 million in many cities. If you live in such a high-cost state, you may want to consider private flood insurance that offers higher levels of coverage.
“Homeowners really need to consider the financial implications of what could happen if their properties flood and they have to pay out of pocket,” Saleh said.
Copyright 2023 Bloomberg.
Climate Change Flooding in California