The biblical story of Noah is currently being retold in movie theaters across the country, but the next "great flood" is not expected anytime soon. Still, some homeowners in the Northeast are still rebuilding after Superstorm Sandy, which hit the region two days before Halloween 2012 with strong winds and a storm surge not witnessed in a very long time.
Sandy reminds us how destructive severe flooding can be. Not only did the storm swamp hundreds of homes along the Long Island, N.Y., and New Jersey coasts, it caused enormous flood losses in Manhattan's pricey brownstone communities.
Sandy was classified by the National Hurricane Center as an extra-tropical storm, a weather event created by temperature contrasts in the atmosphere, as opposed to a hurricane borne from warm ocean water. Sandy produced a tidal surge that was disproportionately and surprisingly large, exceeding the one-in-500-year flood elevation estimates developed by the Federal Emergency Management Agency (FEMA).
While prognosticators and climate-change advocates debate whether floods will become more common, those of us in the insurance industry can remind customers how damaging they can be. Floods can not only severely damage a home and in some cases completely destroy it, they can breed disastrous health impacts caused by contaminated drinking water, hazardous material spills, disease-carrying insects and rodents and toxic mold. Larger storms have the capacity to cause rivers, streams and lakes to overflow and alter the flood plain map for future generations currently not exposed to such risks.
Norman Heinrich, president of the Miami-based managing general agency WNC Insurance, is a specialist underwriter of flood risks for affluent homeowners. When he evaluates the flood perils at houses along coastlines and rivers, he tugs along detailed flood maps, historical weather pattern data and decades of knowledge to assess the potential for loss.
Norman also is a straight shooter, who tells it like he sees it. "I'm not going to instruct a wealthy person not to build a mansion along the coastline because there is a greater chance of flooding from a tidal surge," he said. "I understand why such individuals want to have their homes in a beautiful place. Rather, I'm going to help them manage the risk before they build, and buy the best insurance possible afterwards to transfer the threat of loss."
Learning Lessons
Unlike most people, Norman was not surprised by the flood devastation that occurred in the wake of Sandy. "People want to live by the water and in the mountains because they're special places," he said. "Their homes also are more expensive, so when disaster strikes the related costs are going to be sizable."
