Floods – Know the Risks, Know Your Coverage

Southampton has a moderate risk of flooding over the next 30 years, according to Riskfactor.com, which evaluates risks from such environmental threats as flooding, wildfires, extreme heat and severe wind.

As Southampton feels the effects of a changing environment, numerous weather events will likely impact more properties within it.

If a low-likelihood storm resulting in severe flooding — a once-in-100-years flood event — occurred today, it might impact about 300 Southampton properties according to Riskfactor. This type of event has a 26 percent chance of occurring at least once over the life of a 30-year mortgage. In the same time span however, due to a changing climate, a similar event might affect 430 properties. In Montauk, consider that there are 532 properties with a greater than 26 percent chance of being severely affected by flooding over the next 30 years, representing 16 percent of all Montauk properties.

The largest flood zones on Long Island are on the South Shore, with Fire Island usually being the first area to flood and Montauk Point often not far behind. Due to the positioning and low elevation of the North and South Forks, each is considered flood-vulnerable in the event of a strong hurricane. Another factor is the point at which a storm strikes during the tide cycle. A high-tide strike can have a much greater impact than one at low tide.

The Atlantic meridional overturning circulation, a large system of ocean currents moving warm water from the tropics into the North Atlantic, could collapse by the middle of the century or possibly any time post-2025 because of human-caused climate change, a recent study suggests. Such a collapse could trigger rapid weather and climate changes in the United States, Europe and elsewhere. It could bring about an ice age in Europe and sea-level rise in cities such as Boston and New York, as well as more potent storms and hurricanes along the East Coast.

But not all flooding is caused by a catastrophic weather event. Flooding is also caused by storm-generated flash floods, overflowing or surging water bodies such as rivers, ponds, lakes and oceans and oversaturated ground. Within a home, it can also be caused by a broken or leaky pipe. With the exception of a bursting pipe, no type of flood damage is covered by a standard homeowners insurance policy.

“While Hurricane Sandy helped to make flood insurance a hot topic, you do not need to be near the water to suffer flood damage,” said Bret Pahwul, the president of Harbor Financial Partners in Southampton. “The news media regularly broadcasts extreme weather events. People have become more aware of this phenomenon.”

Hurricane Ida of 2021 brought strong winds and heavy flooding to the Louisiana coast before delivering so much water to the Northeast that Philadelphia and New York City saw flooded subway stations days after the storm passed while causing deaths thousands of miles from where it first made landfall.

Homeowners in the nation’s most flood-prone areas are facing huge price increases for flood insurance that could cause hundreds of thousands of people to cancel their policies and risk financial ruin if their home is flooded. The cost of flood insurance is primarily based on the cost of replacing a home and each property’s unique flood risk. An elevation certificate, usually provided by a surveyor, shows compliance with the flood-plain management ordinance. A community’s permit file must have an official record showing that new buildings and substantial improvements in all identified special flood hazard areas are properly elevated.

The Federal Emergency Management Agency, which runs the United States’ largest flood insurance program, recently published projections showing that its premiums are on track to jump by thousands of dollars a year in some areas. Lenders usually require such coverage for mortgages on homes in high-risk flood zones. Most flood insurance is issued by the National Flood Insurance Program (NFIP), which is managed by FEMA, but private companies also offer flood insurance in many states.

“The nation is at risk because of increased climate change and increased development in risky areas,” said David Maurstad, a FEMA official in charge of its flood insurance program. “There’s a better understanding of that and how we can work as one community to not ignore the flood risk this nation faces year after year.”

Nationally, the average premium for owners of single-family homes in flood-prone areas is projected to double — from $888 to $1,808; however, some areas will see decreases. When a flood claim is filed, building coverage pays to repair structural damage to the home. Contents coverage pays to repair or replace belongings such as furniture, electronics, clothing and certain types of appliances. Renters can purchase a contents-only flood insurance policy. FEMA’s Risk Rating 2.0 uses five main variables to determine a property’s flood risk:

• Historical flood frequency

• Flood type: river, rainfall, coastal surge, coastal erosion

• Distance to water source

• Property characteristics: elevation, soil, etc.

• Cost to rebuild

‘I Thought I Was Covered’

Homeowners insurance does not cover flooding unless you’ve specifically added flood coverage to the policy.

“It’s critical to be insured by someone who knows the area and can identify the risks,” Pahwul said.

Should a flood damage plumbing by washing soil or debris into pipes, a homeowner’s policy likely would not cover these repair costs. Standard homeowner’s insurance policies typically cover water damage from burst pipes, including frozen ones, providing it was due to a sudden and accidental event. Cleaning, repair or replacement of wood flooring, drywall and furniture due to water damage as a result of a burst pipe are usually covered. However, a drip under the sink or toilet that has been neglected and gradually caused a small flood which warped the floor, damaged drywall or created mold will not be covered.

Nearly half (49 percent) of U.S. residents who moved in the last year believe the increasing frequency or intensity of natural disasters, extreme temperatures, and/or rising sea levels will likely impact home values in their area in the next 10 years, according to a Redfin survey. Still, only about 5 percent of respondents who moved in the last year or plan to move in the next year listed climate change as a reason for their relocation. Ironically, the most flood-prone U.S. counties saw 384,000 more people move in than out in 2021 and 2022 — a 103 percent increase from the prior two years, when 189,000 more people moved in than out notes Redfin, which analyzed domestic migration data and climate-risk scores. Many theorize this is partly due to the housing affordability crisis that has increased migration into less expensive but more climate-risky areas.

U.S. population growth in hurricane-prone states, coupled with the increasingly heavy rainfall, which accompany these storms, has generated costlier insurance claim payouts for wind and flood-caused property damage. “While wind speeds and storm surge in coastal areas grab headlines, inland flooding is on the rise,” according to the Insurance Information Institute report “Hurricanes: State of the Risk.”

Flood Insurance Basics

• A home’s location is a crucial factor in setting a flood insurance rate.

• One inch of flood water can cause up to $25,000 in damage.

• More than 25 percent of NFIP flood insurance claims are from outside high-risk flood zones.

• NFIP flood insurance policies offer up to $250,000 for the structure of a home and up to $100,000 for personal belongings.

• Homeowners are required to have flood insurance if in a Special Hazard Area and have a federally backed mortgage.

• Natural infrastructure like wetlands and open space preserves can reduce flood risk.

If you’re moving into a new home, apartment or business location, ask your mortgage lender, local officials or insurance professional if the location has been known to flood. The National Flood Insurance Program (NFIP) will also be able to provide flood risk information on your area. Even if you don’t live in a high flood-risk area, you may be in some danger of loss. Some 20 percent of flood claims are filed in low to moderate flood-risk areas.