Over 1M Homes in Florida Areas Hit Hardest by Ian Have No Flood Insurance

Over a million households in Florida counties hit hardest by Hurricane Ian are thought to be without flood insurance, according to Newsweek's estimates, which could potentially leave many out of pocket when it comes to covering the expenses for repairing, let alone rebuilding, their homes.

Hurricane Ian is expected to financially ruin numerous families in the Sunshine State, after the storm swept through the region leaving a path of destruction caused by powerful ocean surges, flash floods, torrential downpours and devastating winds.

Approximately 30 percent of homes in the highest-risk areas for flooding nationwide have flood coverage, according to 2018 data from the Risk Management and Decision Processes Center of the Wharton School at the University of Pennsylvania.

This would mean that of the 1.8 million households in the nine counties—tallied by Newsweek using Census Bureau data—that were struck the hardest by Hurricane Ian, roughly 1.26 million households (70 percent) are without the essential financial protection they need.

President Joe Biden declared a major disaster in the counties of Charlotte, Collier, DeSoto, Hardee, Hillsborough, Lee, Manatee, Pinellas, and Sarasota—the aforementioned nine hardest hit.

Property data and analytics company CoreLogic estimated that the storm could cost up to $47 billion. In comparison, Hurricane Katrina in 2005 caused the most insured losses, reaching $89.7 billion in 2021 dollars, while Superstorm Sandy in 2012 caused $35.1 billion in losses, according to data from the industry-funded research group Insurance Information Institute (III).

When Hurricane Ian swept through the state on September 28, the property insurance market in Florida was already in crisis. Scores of fraudulent roof replacement scams over the years led to rampant litigation and forced many insurance companies to settle. Furthermore, a lack of oversight in the state, due to inadequate regulations, meant the financial responsibility of certain insurers was underwhelming. Some insurance companies left the state, some closed shop. In the end, this gave less choices to Florida residents and premiums surged.

Regardless, most insurance firms in the state do not cover flood damage under their standard hurricane insurance policies. This could leave millions unable to claim for the damage the storm caused to properties.

Other parts of the state also suffered huge flooding concerns, despite not being among the nine counties for which Biden declared a major disaster on Thursday September 29.

The National Weather Service reported that Florida's third-largest city, Orlando, saw 15 inches of rain and flash floods.

The city has approximately 113,000 households, yet records show that only 2,792 buildings were covered by federal flood insurance—a coverage rate of around 2.5 percent.

Most of the flood coverage in the U.S. is sold through the Federal Emergency Management Agency's National Flood Insurance Program (NFIP). It is not clear how many people in Florida have gone to private insurers for their flood policy. According to Forbes, the average cost of flood insurance from the NFIP is $995 a year.

Those without flood insurance are then left to rely on Federal Emergency Management Agency (FEMA) aid, which is capped at $37,900 for home repairs, such as for the roof, critical utilities, windows and doors, and another $37,900 for lost property.

Abbe Sultan, co-founder of Flow Insurance, a private flood insurance program manager, told Newsweek that many households could be under the assumption that their homes are within the Special Flood Hazard Area (SFHA), which is a term used by FEMA to refer to the land area covered by significant floodwaters outside of natural disaster events.

"CoreLogic estimates another 30-50 percent of seriously flood-exposed structures in Florida are not included in the Special Flood Hazard Area (SFHA)," said Sultan. "The problem is that the owners of these structures believe that if they were a flood risk, they would be within the SFHA, so they tend not to purchase flood insurance, leaving them exposed."