Storm surges and high tide floods are affecting coastal properties on a more frequent basis. Nearly one trillion dollars’ worth of waterfront property could be affected by these rising waters, and property values are starting to reflect this watery threat.
Charleston, South Carolina is one city that has already experienced significant losses due to coastal flooding, losing $266 million in value on waterfront properties since 2005. Other cities such as Nantucket, Massachusetts; Foley, Alabama; and Queens, New York are projected to be at risk of losing approximately $1 billion in real estate each by 2045, due to these water level changes.
As coastal living becomes increasingly risky, what do insurance agents need to know about coastal insurance and flood insurance for their clients? Below are some important things insurance agents should know about how coastal flooding and storms surges affect beachfront property.
- The property values in some places continue to decrease. The more concerned a community is about the prospect of flooding, the more likely the homes are to sell at a lower price.
- The likelihood of environmental hazards are the real threat to property values, not the actual present-day quality of the home. Taking into consideration several factors (such as water views, remodels and flooding history), researchers discovered a correlation between projections of water damage and significant property value decreases.
- As floods grow more frequent, the threshold for “normal flooding” in a majority of coastal towns will increase as well. Greater instances of persistent flooding will affect housing prices, housing availability and insurance costs.
- Both homeowners and commercial property owners are at risk for financial and physical loss with regular flooding. Mortgages on homes that could be part of chronic flooding areas could cause property values to decline and homeowners to become upside-down on their mortgages.
As coastal flooding continues to be a threat to nearby property, U.S. coastal communities need to prepare themselves for disruption to their homes, their businesses, their properties and their lives, and are likely to turn to insurance agents and agencies for answers to their questions and concerns.
About Wilmington Insurance Agency
Wilmington Insurance Agency delivers comprehensive coastal property solutions. We are a Managing General Agency and provide independent insurance agents with property and liability insurance solutions for residents and businesses primarily in Maryland and Virginia. We work alongside our sister company, Wilmington Insurance Company, established in 1996 and providing Property & Casualty commercial lines business, homeowners, and condominium insurance in the state of Delaware. To learn more about how we can help you to expand your book of business in the coastal market, contact us at (302) 231-2800.