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Matthew Insurance Claims Could Reach $1.5 Billion In NC

flooding in the Fayetteville area after Hurricane Matthew
Photo courtesy of Kareen White
Flooding in Fayetteville after Hurricane Matthew

As floodwaters finally recede away from eastern North Carolina, families have returned to their homes to survey the damage and pick up the pieces.

What they are finding is that this could end up as one of the costliest storms in U.S. history.

Early estimates peg property insurance claims at between $4 billion and $6 billion, with claims in North Carolina accounting for some $1.5 billion of that overall figure, according to groups like the Insurance Information Institute. What’s more, these estimates don’t include damage caused by flooding, which is largely covered under the National Flood Insurance Program, under the Federal Emergency Management Agency.

Through the years, other storms have left utter devastation in their wake, running up sometimes tens of billions of dollars in damages. Hurricane Frances in 2004 was the tenth costliest hurricane in the United States, according to Property Claim Services, a Verisk Analytics business. It ran up an estimated $5.7 billion in damages, when adjusted for inflation. Hurricane Rita, just one year later, caused an estimated loss of $6.7 billion, when adjusted for inflation.

Top ten Costliest Hurricanes In The United States
Credit Property Claim Services / Verisk Analytics
Verisk Analytics
Top ten Costliest Hurricanes In The United States. Property damage only.

Importantly, these figures estimate property coverage, and exclude flood damage, which is covered by the FEMA program. The National Hurricane Center also publishes estimates of costliest hurricanes, though has released estimates only through 2010. By the federal estimates, Frances caused $9.5 billion in damages while Rita caused $12 billion.

The costliest hurricane in national history is Katrina, which ran up a whopping $108 billion in damages, more than three times that of Ike, the second costliest in history. National Hurricane Center estimates are not adjusted for inflation.

“The most important thing to remember is that floods are not covered under the basic homeowner’s insurance policy,” said Russ Dubisky with the Insurance Federation of North Carolina. “Any rising water that comes up and inundates your property is going to be considered a flood; you will need a separate flood insurance policy to have that insured.”

Dubisky estimated that upward of 90 percent or even 95 percent of all flood insurance policies are through the national program. This can present its own set of problems, according to Bill Gentry, director of the Community Preparedness and Disaster Management Program at the UNC-Chapel Hill Gillings School of Global Public Health.

Many people are likely underinsured, estimated Gentry, and even homeowners with enough coverage must find the proper paperwork and avenues to file claims. “Federal recovery, really, is anything but easy,” Gentry said. “There is a lot of paperwork, there are a lot of hoops to jump through, and then there is just the navigation of official documents.”

Locating proof of insurance paperwork can be difficult, especially if those important documents fell victim to the flooding. That leaves people seeking to replace the proper documents, only to find that they need more identifying paperwork just to even succeed at that. “It’s very unfortunate. It’s kind of a bad dance you have to go through to try to get what you can,” said Gentry.

Jason deBruyn is the WUNC health reporter, a beat he took in 2020. He has been in the WUNC newsroom since 2016.
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