View this article online: https://www.claimsjournal.com/news/national/2013/05/29/229784.htm
A recent report on urban flooding conducted by the Center for Neighborhood Technology (CNT) found that, when aggregated by ZIP code, there is no correlation between property damage claims and recognized floodplains.
According to the report, when it comes to flooding in cities, it makes little difference whether a property is located within a floodplain or not. This is one of the key findings of CNT’s report, The Prevalence and Cost of Urban Flooding.
The analysis combined insurance claims data, property owner reports and GIS mapping of flooding in an urban environment to identify 177,000 flood damage claims in Cook County, Ill., over a 5-year period. Average payouts per claim were $3,733, with total claims amounting to $660 million over the five years examined. Seventy percent of the online survey respondents estimate that they had flooded three or more times in the last five years, 20 percent have flooded 10 or more times.
“In looking at the data…we saw a somewhat shocking picture of the cost and frequency of urban flood damage,” said Harriet Festing, water program director at CNT. “More shocking is that we know it represents a significant understatement of actual flood damage. There’s more data out there from insurers and property owners that will tell an even more disheartening story.”
The report, the first of its kind to collectively analyze flood damage claims and sewer- and drain-backup claims data from multiple providers of insurance and other financial assistance, is part of a first phase of research at CNT on the prevalence and cost of flooding to property owners—such as homes and businesses—in urban and suburban areas. Urban flooding is caused by too much rain overwhelming drainage systems and waterways and making its way into basements, backyards and streets.
CNT researchers combined insurance claims payout data for property damage in Cook County, IL (between 2007–2011, aggregated by ZIP code), with analysis of 115 responses to an online survey of property owners in Cook County that experienced property flooding in the last five years. Researchers found that urban flooding in Cook County is chronic and systemic, resulting in damage that is widespread, repetitive and costly.
According Festing, there are multiple causes for the flooding damage.
“There are multiple forms of damage, and our experience is that people often don’t know the cause of them because they could be happening simultaneously. Then each of those triggers a different type of insurance. Multiple things could be happening in the property, and they would have to go through different insurance providers,” said Festing.
The report found that urban flooding resulted in multiple social and economic impacts on property owners. The online survey found that 41 percent sustained a loss of use of part of their property, 63 percent lost valuables and 74 percent lost hours of work to clean up.
The report found there was no correlation between damage payouts and floodplains. When all types of claims were aggregated, some of the Cook County ZIP codes with the highest concentration of payouts (number and value) had no land area located within federally designated floodplains.
According to Festing, FEMA’s floodplain mapping is developed from engineering and hydraulic models and data, and it’s historically been based around where water flows through open channels, rivers, streams and coastal areas and understanding what happens when those overfill.
“They don’t really have the information on this type of flooding that’s caused by urban flooding, when rain falls on flat surfaces and there are no identifiable channels,” Festing said.
The majority of respondents -76 percent – had invested in measures to prevent future flooding, such as downspout disconnection and pumps, but only six percent believed that the investment had solved their flooding problem.
CNT research conducted in 2012 found that communities across the Great Lakes region suffer from the impacts of urban flooding caused by moderate and heavy rain running off roofs, roads and parking lots. The economic and social consequences are considerable: experts estimate that wet basements decrease property values by 10-25 percent, and that almost 40 percent of small businesses never reopen their doors following a flooding disaster.
Researchers remain mum on the insurers involved in the research thus far.
“We’re not saying who released the data at this stage. They’re sensitive about it, and I think probably the more routine this becomes, the easier. We’ve had very, very positive feedback from the insurance companies. I think it’s the first time that they have released data in this way,” Festing said.
The organization plans to expand its research to cover commercial properties and work with insurers to design an act that would facilitate the release of information related to flooding losses.
Funding for this research was provided by State Farm Insurance Companies, Surdna Foundation, The Joyce Foundation, and Grand Victoria Foundation.
Source: CNT