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September 30, 2013

Colorado Flood Damage Estimated at Over $2 Billion

Economic damages from the recent flooding in Colorado are expected to surpass $2 billion, according to a recent report from catastrophe risk modeler Eqecat. Most of that financial burden will fall on residents because very little flood risk is insured in the state.

Between 1,500 and 1,800 homes have been destroyed and thousands of homes have been damaged, leaving more than 10,000 people displaced. The estimated total cost to repair destroyed homes averages $300 million and early reviews of residential flood damage indicate an average of $20,000 to restore each of the 17,500 flooded homes that were not destroyed. But because of exclusions to the basic homeowners insurance policy, most of the losses will not be covered by insurance.

Historically, a very small portion of homeowners purchase flood insurance on homes outside of the 100-year flood zones outlined by the U.S. National Flood Insurance Program, which provides insurance as part of a mortgage. Of the 17 counties impacted, most of the areas are not within defined flood zones.

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http://www.riskmanagementmonitor.com/colorado-flood-damage-estimated-at-over-2-billion