A repeat of the 1927 Great Mississippi Flood, the largest flood disaster in U.S. history, could cost up to $160 billion in economic damages if it were to recur today, according to Risk Management Solutions, a Newark, Calif.-based catastrophe risk analysis company.
A new study by RMS, published on the 80th anniversary of the Mississippi Flood, shows that in a repeat of this flood today, the losses would be between $130 billion and $160 billion. Almost two-thirds of the total would be a result of residential damage, with another third from damage to commercial and industrial properties. While there would be some damage to all the states along the lower Mississippi River, Louisiana would sustain nearly 40 percent of the total loss.
Although the extreme river flows that led to the 1927 flood are rare events, research suggests that climate change and global warming are already increasing the potential for exceptional flows on great river basins such as the Mississippi. RMS said. This has an impact on how flood risk should be managed and how levees need to be maintained and strengthened.
“Levees have been built stronger and higher since 1927, but the bed of the Mississippi River has also risen in many places,” said Dr. Robert Muir-Wood, chief research officer at RMS. “With stronger levees there should be fewer failures, but as we saw in New Orleans after Hurricane Katrina, relatively short sections of levee failure can have truly catastrophic consequences – the taller the levee, the greater the speed and force of the flooding.”
Today, the National Flood Insurance Program would cover a portion of the loss if it were to recur today. “Based on the existing level of NFIP take-up, around 80 percent to 85 percent of the loss would be uninsured,” noted Dr. Patricia Grossi, senior researcher at RMS. “This is a higher uninsured loss than resulted from Hurricane Katrina.”
Consequently, it is likely that private insurers would face significant pressure to pay part of the flood loss under the terms of fire insurance coverage, and they could be confronted with lawsuits claiming that damage was caused by levee failure, debris damage, or contamination rather than simply flood inundation, RMS indicated. There would also be significant political fallout from a disaster of this magnitude in the lower midwestern states, with the majority of the people in the affected area being forced to relocate or live in temporary accommodations.
The 1927 flood inundated parts of Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee, killed 250 people and caused approximately $250 million to $350 million in loss. “With the economic and social changes that have occurred along the Mississippi River since 1927, a modern-day event would not just be a regional economic catastrophe but a national disaster,” Grossi said.
To view the full report, visit: www.rms.com/Publications/1927_MississippiFlood.pdf.
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