Most coastal Carolina homeowners don't have flood insurance to help rebuild after Florence

Flood waters around a home in Spring Lake, North Carolina.
(Image credit: Joe Raedle/Getty Images)

When Florence's still-rising floodwaters finally subside, the coastal Carolina regions that have suffered the worst of the storm's wrath will begin to rebuild. But for many, the question remains: With what money?

Only about 10 percent of housing units have flood insurance in many of the areas Florence drenched, and homeowners expecting to rely on Federal Emergency Management Agency (FEMA) help to rebuild will be sorely disappointed. While a good flood insurance policy will provide several hundred thousand dollars to restore a house and replace possessions, FEMA flood grants cover, at most, $33,000. Most payouts come in below $10,000.

Thus, for "the insurance industry in general, Florence looks like ... a manageable event that will hurt earnings to some degree but won't affect capital," The Wall Street Journal reports. Because there are so few flood insurance policies to pay out, homeowners rather than their insurers will take on the financial brunt of the storm's destruction. Accordingly, share prices for major insurers recovered swiftly after a few days' dip as Florence made landfall.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Flood insurance is distinct from regular homeowner's insurance. It must be purchased separately from either private carriers or the National Flood Insurance Program (NFIP), a FEMA subsidiary, a month before flood damage occurs to receive a payout. The NFIP, which now operates at a loss, offers below-market insurance rates for construction in flood-prone areas, arguably subsidizing dangerous construction.

Continue reading for free

We hope you're enjoying The Week's refreshingly open-minded journalism.

Subscribed to The Week? Register your account with the same email as your subscription.

Bonnie Kristian

Bonnie Kristian was a deputy editor and acting editor-in-chief of TheWeek.com. She is a columnist at Christianity Today and author of Untrustworthy: The Knowledge Crisis Breaking Our Brains, Polluting Our Politics, and Corrupting Christian Community (forthcoming 2022) and A Flexible Faith: Rethinking What It Means to Follow Jesus Today (2018). Her writing has also appeared at Time Magazine, CNN, USA Today, Newsweek, the Los Angeles Times, and The American Conservative, among other outlets.