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

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.

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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.