Hurricane risk will affect $11T of properties in 2024

Approximately 32.7 million residential properties with a reconstruction value of under $11 trillion are at risk for some form of hurricane damage in the upcoming season as experts are predicting an active year, CoreLogic said.

As history has shown, one storm that makes landfall could create significant amounts of damage that homeowners might be dealing with for years past the event.

Last year featured 20 named storms, with 10 rising to the level of hurricane and three grading out at Category 3 or higher on the Saffir-Simpson scale, the CoreLogic report pointed out. But only one hurricane (Idalia) made landfall, located in a remote part of the Florida coastline, with insured loss of under $2 billion; this is exclusive of damage from any tropical storms that came ashore.

Before last year's hurricane season, CoreLogic estimated 33 million of properties at risk, with reconstruction cost value of $11.6 trillion.

For the upcoming season starting in June, the National Oceanic and Atmospheric Administration is expecting between 17 to 25 named storms, with eight to 13 rising to the level of hurricanes, including four to seven being categorized as major hurricanes. NOAA rates 2024 of having an 85% chance of being an above-normal season for storm activity.

For mortgage lenders, history has shown that between property damage and job loss, delinquency rates typically spike in the aftermath if a hurricane were to make landfall.

The potential combined reconstruction cost for 2024 storms is $10.8 trillion, CoreLogic estimated. The number of properties graded at a very high or even greater risk was slightly under 15 million, with the reconstruction cost projected to be $4.2 trillion. The subset of properties at extreme risk consisted of 6.4 million homes with a replacement cost of $1.7 trillion.

Approximately 7.7 million of these homes have an additional exposure to storm surge because of their location near the Atlantic Ocean coast, with potential replacement cost of $2.3 trillion.

Depending on the state, property owners may or may not be covered by their homeowners' insurance policy for wind damage. However, that policy does not cover water damage from storm surge. That is only covered by flood insurance, which is only required on properties in zones mapped by the Federal Emergency Management Agency and optional elsewhere.

"Insurance remains one of the most important tools for a resilient society, given the role it plays in recovery," said Maiclaire Bolton Smith, CoreLogic's vice president, hazard and risk management, in a press release. "With the potential for an active hurricane season on the horizon, insurers and homeowners should do everything they can to prepare and mitigate as much risk as possible."