Earlier this year, flooding was established as the top natural hazard risk in the United States following a number of devastating flood events in 2017. A number of communities across the U.S. have experienced loss and destruction due to flooding in 2018, as well. Tropical storms, hurricanes and general heavy rains were mostly to blame for flooding events up and down the East coast, in the midwest, along the Gulf coast and even in central Texas. None of these events are isolated incidents, and research confirms that flood risk will continue to increase, affecting coastal communities in more ways than one for decades to come.
One of the major financial effects of increasing flood risk falls on the coastal real estate market. A study by the Union of Concerned Scientists (UCS), released this summer, showed some additional examples of the shocking impacts that sea-level rises and tidal flooding are projected to have on coastal real estate. According to the report, in a high sea level rise scenario, as many as 311,000 coastal homes – worth a total of $117.5 billion in today’s market – are at risk of chronic flooding in the next 30 years. Chronic flooding, in this survey, is defined as high-tide flooding that occurs 26 or more times per year.
While three decades may seem like a long time, 30 years is the average lifespan of a typical mortgage, meaning current buyers and new homeowners are especially at risk. By 2100, the projections are even more staggering; the homes of 4.7 million Americans are predicted to be vulnerable to rising sea levels, posing a threat to nearly one trillion dollars in coastal real estate.
Some coastal cities have already seen a decline in property related to flood risks. According to a recent study from researchers at Pennsylvania State University and the University of Colorado at Boulder, homes that are vulnerable to rising sea levels sell for around 7% less than similar unexposed properties. Homes that do not expect flooding in the next century sell at a smaller discount of 4%.
One city, in particular, has experienced significant losses due to coastal flooding. Between 2005 and 2017, Waterfront properties in Charleston, South Carolina have declined in value by $266 million as a result of chronic and persistent flooding. Experts predict the trend to continue, resulting in approximately $653 million in flood-related depreciation losses by 2033. While officials in Charleston, and in other coastal communities, are working on finding ways to flood-proof their communities and prevent rising sea levels from negatively impacting residents, no solid plans have been made. In the meantime, rising sea levels continue to be a threat to the coastal real estate market.
At AmSuisse, we specialize in providing insurance programs for hard-to-place properties, including coastal property. We are able to offer multi-peril coverage on an admitted and non-admitted basis for many products that address the full spectrum of hard-to-place risks. Our property insurance programs are custom-designed to fit the needs of the insured, whatever they may be.
Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.