U.S. Faces Billion-Dollar Risks as 2024 Hurricane Season Forecasts Elevated Home Damage

The 2024 U.S. hurricane season, running from June 1 to November 30, is forecasted by NOAA to have a 60% chance of above-normal activity, with 13-19 storms, including 6-10 hurricanes, and 3-5 major hurricanes. A recent Cotality report highlights that millions of homes across Florida, Texas, North Carolina, New Jersey, and New York face significant risk from hurricane-force winds and storm-surge flooding. Over 33 million homes are estimated to be at moderate or greater risk of wind damage, with more than 6.4 million homes vulnerable to storm surge.

The cumulative financial exposure for rebuilding homes affected by wind damage alone could reach $11.7 trillion, with an additional $2.2 trillion risk from storm surge damage. Increasing property concentrations in coastal states such as Florida and Texas are amplifying insurance market vulnerabilities, with rising premiums reflecting greater frequency and severity of extreme weather events. While standard homeowners insurance policies generally cover wind damage, flood damage is excluded and requires separate flood insurance, commonly through NFIP or private carriers. However, flood insurance penetration remains low, with only around 6% of U.S. homeowners carrying such coverage, even though flooding accounts for 90% of U.S. natural disaster losses. High deductibles and exclusions for wind-related hurricane damage in certain high-risk zones pose additional risks for insured homeowners, with hurricane deductibles sometimes reaching 5%-10% of dwelling coverage.

The combination of increased physical risk, gaps in flood coverage, and policy structure complexities underscore significant exposure for property owners and insurers alike. Budget reductions at FEMA have raised concerns about limited federal disaster support, underscoring the importance of adequate insurance coverage and individual preparedness to mitigate potential financial impacts. Industry experts urge for heightened awareness and proactive planning by insurers, regulators, and homeowners in hurricane-prone regions. Current climatological trends and insurance market conditions suggest that major hurricane landfalls could have profound implications for U.S. property insurance markets and community resilience.