CoreLogic: 2018 hurricanes put 6.9m homes at risk of storm-surge damage

Reconstruction cost estimates increased 6.6% from 2017 due to higher regional construction, equipment, and labor costs

By Francis Monfort

04 Jun 2018

More than 6.9 million homes are at risk of potential damage from hurricane storm-surge inundation for the 2018 hurricane season, representing a potential total reconstruction cost value (RCV) of more than $1.6 trillion, according to the 2018 CoreLogic Storm Surge Report.

The analysis looks into risk from hurricane-driven storm surge for homes along the Atlantic and Gulf coastlines across 19 states as well as for 86 metro areas. RCV figures represent the cost to completely rebuild a property in case of damage, including labor and materials by geographic location, assuming the worst-case scenario of 100% destruction.

CoreLogic found that the Atlantic Coast has more than 3.9 million homes at risk of storm surge with an RCV of more than $1 trillion, an increase of around $30 billion compared to 2017. Gulf Coast homes with the same risk total more than 3 million, with more than $609 billion in potential exposure to total destruction damage, a $16 billion increase compared to 2017. CoreLogic reconstruction cost estimates for 2018 increased 6.6% from a year ago, reflecting increased regional construction, equipment, and labor costs.

The National Oceanic and Atmospheric Administration (NOAA) predicts that the upcoming hurricane season will have near- to above-normal activity. According to predictions, there will be one to four Category 3 or higher hurricanes in 2018 out of five to nine total hurricanes. NOAA predicts a 70% likelihood of 10 to 16 named storms during the season.

"While industry predictions for this year’s storm season indicate average activity levels, associated storm-surge risk remains an important consideration for residential and commercial properties in the 19 states analyzed,” CoreLogic Senior Hazard Scientist Tom Jeffery said. “Depending on the location of a storm’s landfall and that area’s population density and reconstruction costs, lower-category storms can cause just as much damage as storms in higher categories.”