Flood damage will cost the average homeowner $4,400 this year, report says

Analysis finds premiums for those with flood insurance don’t come close to paying the bills
Credit: (AP Photo/Matt Rourke)
File photo: June 20, 2019, people inspect the floodwaters submerging Broadway in Westville after a severe storm.

More than 94,000 New Jersey houses are subject to substantial flooding this year at an average cost of some $4,400 per property, and the financial damage will get worse as climate changes over the next 30 years, according to a report published Monday.

“The Cost of Climate” by the nonprofit First Street Foundation calculated that another 10,800 properties across the state will suffer flood damage by 2051 because of the bigger storms and higher seas that come with climate change, and that the average annual loss will rise 53% to $6,755.

The report also found that residential properties carrying federal flood insurance — as those inside the Federal Emergency Management Agency’s special flood-hazard areas are required to do — can expect flood-related losses averaging $5,676, or almost three times the average premium for those properties.

Outside the FEMA-designated areas, the gap between annual losses and flood insurance premiums paid is even greater, the report said. It estimated that those premiums would have to rise 3.7 times to cover the anticipated cost of the damage.

And in a reminder of the challenges facing the already-indebted National Flood Insurance Program, the report estimated that if all of New Jersey’s flood-prone properties were federally insured, the payout risk would exceed premiums by some $11 billion over the next 30 years.

Most flood-prone towns 

Towns with the greatest losses this year were Toms River, Beach Haven West and Ocean City, while the towns where flood losses are expected to grow the fastest over the next 30 years were Pennsville — where losses are projected to rise by some 200% — followed by Long Branch and Little Silver.

The report, based on public and private data including that from county assessors, the U.S. Army Corps of Engineers, and the Federal Insurance Administration, offers insights into individual flood risk that are not currently taken into account by credit, insurance or real estate markets, or by homebuyers, the foundation said.

“Quantifying flood risk in concrete dollar terms creates a new context for homeowners, home buyers, financial markets, and government agents to understand the risks associated with flooding, and how those risks change with the climate,” it said.

By providing flood-risk data in granular local detail, the foundation said it aimed to help state and local government allocate resources to the locations and measures that would be most effective in reducing risk.

Although many of the hardest-hit locations are on the coast, the report’s inclusion of inland towns like Princeton, Fair Lawn and Bernardsville shows that climate change is not just a coastal phenomenon.

“It’s not just the Shore, and it’s not just the special flood-hazard area,” said Doug O’Malley, director of Environment New Jersey. “That speaks to the fact that climate change is going to affect more communities than people are expecting. We’re going to be looking at historic losses not just in Shore communities but everywhere.”

Waterfront development

O’Malley said the report underscores the need for the state to prevent development in flood-prone areas. He said the state Department of Environmental Protection has the opportunity to do so in its current review of land-use regulations under the banner of Protecting Against Climate Threats (NJ PACT), which is expected to be published in coming months.

“Studies like this re-emphasize why NJ PACT needs to be as strict as possible about developing flood plains,” he said. “If developers are given the opportunity to build along waterfronts, they will take it.”

Although increasing floods affect the whole state, coastal communities are likely to be especially hard-hit given the forecasts for a 2-foot rise in sea level at the Shore by 2050, according to the latest Rutgers University estimate.

A study by the Union of Concerned Scientists in 2018 identified 21 New Jersey communities that will face chronic inundation — defined as losing the use of at least 10% of their nonwetland areas 26 times a year — by 2035.

Pete Kasabach, executive director of the nonprofit New Jersey Future, said the report affirmed the reality that many sections of the state are vulnerable to flooding, and that it’s going to get worse.

Finding a middle ground

In seeking a way of reducing exposure to flooding, state officials are probably looking for a middle ground between those who seek an immediate ban on building in flood-prone areas, and those who argue for continued development, Kasabach said, noting that state policy on how to respond to the effects of climate change will be stated in a major document due for release on Earth Day, April 22.

Choosing a middle ground would mean that the state makes it a lot harder to build in the areas that are risky, and eventually “you stop building there,” he said.

While reports like this help to lay the foundation for a shift in public attitudes on building in flood-prone areas, it’s unlikely to change many minds because people in vulnerable properties already know it and have flood insurance that pays for them to rebuild when the water comes in, Kasabach said.

“The leap is getting the rest of the people in New Jersey to realize that they are in many ways subsidizing that risk,” he said. “Every time the state has to come in or FEMA has to come in and rebuild, that’s money that’s coming from the taxpayers, and it’s not the taxpayers who live there, it’s the taxpayers across the state and across the country who are paying for that.”

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