Bloomberg Audio Studios, podcasts, radio news. In recent weeks, the southeastern United States has been pummeled by two monster storms. First, there was Hurricane Helene. The catastrophic aftermath of Hurricane Heline. North Carolina was hit with flooding. It hasn't seen in a century, so I'm calling it biblical. Millions of people are still without power, Whole communities have been flatten.

Bloomberg Audio Studios, podcasts, radio news. In recent weeks, the southeastern United States has been pummeled by two monster storms. First, there was Hurricane Helene. The catastrophic aftermath of Hurricane Heline. North Carolina was hit with flooding. It hasn't seen in a century, so I'm calling it biblical. Millions of people are still without power, Whole communities have been flatten.

Helleen was horrific in a way, much worse than anyone expected. There were over two hundred deaths. Of course we're still counting.

Helleen was horrific in a way, much worse than anyone expected. There were over two hundred deaths. Of course we're still counting.

Leslie Kaufman is a reporter with Bloomberg Green who focuses on climate and insurance, and she says, by some estimates, the damage from Hurricane Helene could cost more than one hundred billion dollars in just about two weeks after it made landfall, a second storm hit the United States, Hurricane Milton, with winds up.

Leslie Kaufman is a reporter with Bloomberg Green who focuses on climate and insurance, and she says, by some estimates, the damage from Hurricane Helene could cost more than one hundred billion dollars in just about two weeks after it made landfall, a second storm hit the United States, Hurricane Milton, with winds up.

To one hundred and sixty five miles an hour, now one of the strongest hurricanes ever recorded in the Gulf.

To one hundred and sixty five miles an hour, now one of the strongest hurricanes ever recorded in the Gulf.

Those monster gus sending walls of water six to nine foot storm serves the National Hurricane Center, so as the current path of the storm is a worst case scenario, In the end, it wasn't as bad as forecast, but according to the latest count, that storm caused at least a dozen deaths, flooding, and power outages across Florida.

Those monster gus sending walls of water six to nine foot storm serves the National Hurricane Center, so as the current path of the storm is a worst case scenario, In the end, it wasn't as bad as forecast, but according to the latest count, that storm caused at least a dozen deaths, flooding, and power outages across Florida.

Milton did have terrible winds, It did knock out power to lots of people. It did go inland and cause quite a bit of flooding, and there will be damage that comes from not having power.

Milton did have terrible winds, It did knock out power to lots of people. It did go inland and cause quite a bit of flooding, and there will be damage that comes from not having power.

In Florida, Georgia and the Carolina's people are just beginning to pick up the pieces. The storms have passed and many TV reporters have left those areas. But for Leslie, who's been tracking the financial impact on millions of Americans, this story is just getting started.

In Florida, Georgia and the Carolina's people are just beginning to pick up the pieces. The storms have passed and many TV reporters have left those areas. But for Leslie, who's been tracking the financial impact on millions of Americans, this story is just getting started.

We in the media, and really everyone doesn't spend as much time talking about what a hurricane looks like three months later, six months later, two years later, five years later. The tail of recovery can be very long.

We in the media, and really everyone doesn't spend as much time talking about what a hurricane looks like three months later, six months later, two years later, five years later. The tail of recovery can be very long.

I'm David Gura, and this is the big take from Bloomberg News Today. On the show, the growing cost of hurricane recovery and how back to back storms have put the insurance industry that's meant to shoulder that cost to the test. As extreme weather becomes more common in the US and around the world. Bloomberg reporter Leslie Kaufman says hurricanes and other disasters are costing affected communities more money.

I'm David Gura, and this is the big take from Bloomberg News Today. On the show, the growing cost of hurricane recovery and how back to back storms have put the insurance industry that's meant to shoulder that cost to the test. As extreme weather becomes more common in the US and around the world. Bloomberg reporter Leslie Kaufman says hurricanes and other disasters are costing affected communities more money.

You know, it's very interesting because I've been watching these numbers pretty carefully. The National Oceanic and Atmospheric Administration keeps a list of what they call billion dollar disasters, that is, disasters that cause over a billion dollar in damage. Those things have been rising radically, even adjusted for inflation.

You know, it's very interesting because I've been watching these numbers pretty carefully. The National Oceanic and Atmospheric Administration keeps a list of what they call billion dollar disasters, that is, disasters that cause over a billion dollar in damage. Those things have been rising radically, even adjusted for inflation.

But Leslie says the share of those damages that's covered by insurance hasn't kept up, that.

But Leslie says the share of those damages that's covered by insurance hasn't kept up, that.

Has been steadily shrinking, and that to me is the really interesting part, which is who's shouldering it now. Of course, the federal government has the Federal Emergency Management Agency, which will also come in and give money, but it is not nearly enough, at least for most personal cases, to cover what is needed.

Has been steadily shrinking, and that to me is the really interesting part, which is who's shouldering it now. Of course, the federal government has the Federal Emergency Management Agency, which will also come in and give money, but it is not nearly enough, at least for most personal cases, to cover what is needed.

FEMA administers the National Flood Insurance Program, which offers flood insurance to homeowners who live in areas FEMA has determined our high risk. But Leslie says much of the devastation from these two storms from Milton and Helene has occurred in places that FEMA has not designated as high risk and that's bound to be a strain on many homeowners who aren't covered.

FEMA administers the National Flood Insurance Program, which offers flood insurance to homeowners who live in areas FEMA has determined our high risk. But Leslie says much of the devastation from these two storms from Milton and Helene has occurred in places that FEMA has not designated as high risk and that's bound to be a strain on many homeowners who aren't covered.

The average grant to someone who is not ensured through our National Flood Insurance program to fix their home is five thousand or under.

The average grant to someone who is not ensured through our National Flood Insurance program to fix their home is five thousand or under.

When you look at these two storms and complement and the damage from both of them, and think about them in the context of the strain that the insurance industry is under, our alarm bells ring for you.

When you look at these two storms and complement and the damage from both of them, and think about them in the context of the strain that the insurance industry is under, our alarm bells ring for you.

Well, we should be very concerned right now. We already know that FEMA is stressed to the max.

Well, we should be very concerned right now. We already know that FEMA is stressed to the max.

But there's an important distinction that Leslie says is putting additional strain on homeowners and the insurance industry the cause of the damage.

But there's an important distinction that Leslie says is putting additional strain on homeowners and the insurance industry the cause of the damage.

This is going to be a tale of two different disasters because homeowners insurance in Florida usually will cover wind damage, but it will not cover flood damage. So who has flood insurance here will matter a lot. And this is particularly important for Helene because Helene went up into Georgia and North Carolina, and those are places that don't have a lot of flood insurance. They have almost none. So Helene did real damage. It's going to be a lot less insured. The damage from the wind that came from Milton also damaging, but much more likely to be insured in your homeowner's policy.

This is going to be a tale of two different disasters because homeowners insurance in Florida usually will cover wind damage, but it will not cover flood damage. So who has flood insurance here will matter a lot. And this is particularly important for Helene because Helene went up into Georgia and North Carolina, and those are places that don't have a lot of flood insurance. They have almost none. So Helene did real damage. It's going to be a lot less insured. The damage from the wind that came from Milton also damaging, but much more likely to be insured in your homeowner's policy.

Leslie, do we have data that tell us how many people are adequately insured, how many aren't, how many are underinsured? Do we have a grip on the kind of contours of that story? Yet?

Leslie, do we have data that tell us how many people are adequately insured, how many aren't, how many are underinsured? Do we have a grip on the kind of contours of that story? Yet?

Oh, we do. Only four percent of America has flood insurance, and FEMA is far and away the biggest dominant flood insured. Most people don't even know that they don't have flood insurance on their regular home policy. But most policies do not include flood You would have to get an extra policy through the government, and only four percent of Americans have one of those. Why most of us don't consider flood or real risk, and there's not usually great information about whether where you live is in a flood risk zone. So even if you wanted to know that you are a great risk, it wouldn't be easy to find out.

Oh, we do. Only four percent of America has flood insurance, and FEMA is far and away the biggest dominant flood insured. Most people don't even know that they don't have flood insurance on their regular home policy. But most policies do not include flood You would have to get an extra policy through the government, and only four percent of Americans have one of those. Why most of us don't consider flood or real risk, and there's not usually great information about whether where you live is in a flood risk zone. So even if you wanted to know that you are a great risk, it wouldn't be easy to find out.

Leslie says that until a few years ago, there was just one way homeowners could assess their flood risk.

Leslie says that until a few years ago, there was just one way homeowners could assess their flood risk.

That basic option was whether or not FEMA designated them as being in a severe flood risk zone. If you were in one of these areas that they say is a severe risk for flood, which means that over the course of your thirty year mortgage, there's a one and four chance you'll flood over thirty years, or one percent chance every year. They demand, or anyone who's giving you a mortgage demands that you also get flood insurance through FEMA.

That basic option was whether or not FEMA designated them as being in a severe flood risk zone. If you were in one of these areas that they say is a severe risk for flood, which means that over the course of your thirty year mortgage, there's a one and four chance you'll flood over thirty years, or one percent chance every year. They demand, or anyone who's giving you a mortgage demands that you also get flood insurance through FEMA.

FEMA made maps of these risk zones, maps that were used by homeowners and insurers and urban planners. But a big problem is those maps don't entirely cover the kind of damage we're seeing from these recent storms like Colleen and Milton.

FEMA made maps of these risk zones, maps that were used by homeowners and insurers and urban planners. But a big problem is those maps don't entirely cover the kind of damage we're seeing from these recent storms like Colleen and Milton.

For one thing, they don't even cover rain flooding. They really only cover coastal flooding and riverine flooding, so flooding from a rainstorm, which is pretty common in a lot of places, those maps don't cover. They were never meant to be completely comprehensive, and yet because they were the only option, so many people relied on them to build infrastructure, towns relied on them for zoning.

For one thing, they don't even cover rain flooding. They really only cover coastal flooding and riverine flooding, so flooding from a rainstorm, which is pretty common in a lot of places, those maps don't cover. They were never meant to be completely comprehensive, and yet because they were the only option, so many people relied on them to build infrastructure, towns relied on them for zoning.

Climate change has made storms more intense and more frequent, but according to Leslie, FEMA's maps have not kept up.

Climate change has made storms more intense and more frequent, but according to Leslie, FEMA's maps have not kept up.

FEMA has been trying to update these for years. Even last year they put out a proposal for how to update them include climate information. But everything in this nation is very partisan and political these days, and frankly, no politician, Democrat or Republican really wants to hear that they have more flood zones. Why. It means constructions more expensive, it means there's more areas you can't build. It means there are people who weren't in flood zones who will be in flood zones, who have to get flood insurance, who will call your office and be furious. So before a disaster, no one really wants an expanse of flood zone. It's only after disaster that they say, why didn't you tell me I should have had flood insurance.

FEMA has been trying to update these for years. Even last year they put out a proposal for how to update them include climate information. But everything in this nation is very partisan and political these days, and frankly, no politician, Democrat or Republican really wants to hear that they have more flood zones. Why. It means constructions more expensive, it means there's more areas you can't build. It means there are people who weren't in flood zones who will be in flood zones, who have to get flood insurance, who will call your office and be furious. So before a disaster, no one really wants an expanse of flood zone. It's only after disaster that they say, why didn't you tell me I should have had flood insurance.

And in the meantime, it's left many homeowners unaware of the risks they're facing before storms and unprotected without the resources and coverage they need. But there are better predictors out there, better tools, and the insurance industry is taking notice of them. That's next. After storms like Hurricane Helene and Hurricane Milton, it can take years for communities to recover, and how that recovery goes depends a lot on insurance. Well. For years, homeowners access to disaster insurance has depended on maps the Federal Emergency Management Agency has made to predict flood risk. A big issue Bloomberg's Leslie Coffman says is those maps are out of date. They haven't kept up with the realities of modern storms, which has created demand for better information about what parts of the country are at risk of flooding.

And in the meantime, it's left many homeowners unaware of the risks they're facing before storms and unprotected without the resources and coverage they need. But there are better predictors out there, better tools, and the insurance industry is taking notice of them. That's next. After storms like Hurricane Helene and Hurricane Milton, it can take years for communities to recover, and how that recovery goes depends a lot on insurance. Well. For years, homeowners access to disaster insurance has depended on maps the Federal Emergency Management Agency has made to predict flood risk. A big issue Bloomberg's Leslie Coffman says is those maps are out of date. They haven't kept up with the realities of modern storms, which has created demand for better information about what parts of the country are at risk of flooding.

The result is that we are getting all these companies that can predict flooding, we also are getting companies that can tell you where there is actual flooding.

The result is that we are getting all these companies that can predict flooding, we also are getting companies that can tell you where there is actual flooding.

Leslie recently put FEMA's maps to the test. She compared them to maps from a startup company called Floodbase that used satellite images to show where flooding actually occurred because of Hurricane Helen.

Leslie recently put FEMA's maps to the test. She compared them to maps from a startup company called Floodbase that used satellite images to show where flooding actually occurred because of Hurricane Helen.

In some cases, it was shocking.

In some cases, it was shocking.

In the city of Valdosta in southern Georgia, for example, Leslie says eighty three percent of the flooding from Helene happened outside what FEMA's maps considered to be at high risk of flooding. In Tampa, about a third of the flooding occurred outside of FEMA's high risk zone. Are insurance companies using these new maps by floodbas and other companies, and if not, what are the hurdles to them doing that.

In the city of Valdosta in southern Georgia, for example, Leslie says eighty three percent of the flooding from Helene happened outside what FEMA's maps considered to be at high risk of flooding. In Tampa, about a third of the flooding occurred outside of FEMA's high risk zone. Are insurance companies using these new maps by floodbas and other companies, and if not, what are the hurdles to them doing that.

Oh, insurance companies are using these maps, and they're using maps actually that are much more sophisticated than what Floodbase has. They hire modelers, they pay them a lot of money, and they have maps that not only use all of previous flooding, but they can look at future flooding. They can know a lot of detail about your own personal home based on previous claims issues and how your home was built. They have quite a lot of information, at least the more sophisticated ones, on whether you will flood or not.

Oh, insurance companies are using these maps, and they're using maps actually that are much more sophisticated than what Floodbase has. They hire modelers, they pay them a lot of money, and they have maps that not only use all of previous flooding, but they can look at future flooding. They can know a lot of detail about your own personal home based on previous claims issues and how your home was built. They have quite a lot of information, at least the more sophisticated ones, on whether you will flood or not.

But Leslie says this raises other issues. For one, how insurers will use that information about flood risk and also how it determines who they'll cover.

But Leslie says this raises other issues. For one, how insurers will use that information about flood risk and also how it determines who they'll cover.

The problem is they don't always share that with the public. This allows them to cherry pick which houses they will ensure and not ensure to some extent, or whether to move out of a market entirely.

The problem is they don't always share that with the public. This allows them to cherry pick which houses they will ensure and not ensure to some extent, or whether to move out of a market entirely.

According to Leslie, as the risk of natural disasters like floods, hurricanes, and wildfires grows, some insurance companies may worry about shouldering that additional risk and decide it's not worth it.

According to Leslie, as the risk of natural disasters like floods, hurricanes, and wildfires grows, some insurance companies may worry about shouldering that additional risk and decide it's not worth it.

The small regional players probably were terrified by this, and they'll probably be a lot of them, especially in places that aren't used to flooding like this, will be wiped out. So I think what we're seeing across America is what we've already seen in Florida in California, which is that when you have a series of natural disasters, the small insurance players get sort of shaken out of the system that leaves bigger ones and if they cannot be allowed to charge more money, they will leave the state. It changes the leverage, and in most of those places they either have to change the regulations that is, allow the insurance to charge more, or they have to develop a state back program that's essentially subsidized insurance that will take people that cannot find private insurance.

The small regional players probably were terrified by this, and they'll probably be a lot of them, especially in places that aren't used to flooding like this, will be wiped out. So I think what we're seeing across America is what we've already seen in Florida in California, which is that when you have a series of natural disasters, the small insurance players get sort of shaken out of the system that leaves bigger ones and if they cannot be allowed to charge more money, they will leave the state. It changes the leverage, and in most of those places they either have to change the regulations that is, allow the insurance to charge more, or they have to develop a state back program that's essentially subsidized insurance that will take people that cannot find private insurance.

What is a homeowner to do who's worried about where things are headed?

What is a homeowner to do who's worried about where things are headed?

You could check what's in your insurance policy, always a good idea, and there now are all sorts of public websites where you can check whether you have some risk for flood and fire. If you do, you might consider taking mitigation efforts. Often you can work with your insurance company on this, because just like if you get a new roof, they'll lower your premium, they will reward you in some cases if you take steps to reduce your risk, you could try and move to a place that is less in the eye of the storm. The places in America that have been growing actually are some of the ones that are most climate vulnerable. The woods in California, the Florida Coast, the hail belt in Texas and Colorado, just to give some examples. We are watching a very interesting transformation of the insurance industry. The insurance industry has started to realize before the rest of us have really grappled with it, how much climate change is changing risk.

You could check what's in your insurance policy, always a good idea, and there now are all sorts of public websites where you can check whether you have some risk for flood and fire. If you do, you might consider taking mitigation efforts. Often you can work with your insurance company on this, because just like if you get a new roof, they'll lower your premium, they will reward you in some cases if you take steps to reduce your risk, you could try and move to a place that is less in the eye of the storm. The places in America that have been growing actually are some of the ones that are most climate vulnerable. The woods in California, the Florida Coast, the hail belt in Texas and Colorado, just to give some examples. We are watching a very interesting transformation of the insurance industry. The insurance industry has started to realize before the rest of us have really grappled with it, how much climate change is changing risk.

This is the Big take from Bloomberg News. I'm David Gura. This episode was produced by David Fox. It was edited by Aaron Edwards and Amanda Colson Hurley, with special thanks to Leonardo Nicoletti. This episode was mixed by Alex Segura. It was fact checked by Adriana Tapia. Our senior producer is Naomi Shavin. Our senior editor is Elizabeth Ponso. Our executive producer is Nicole Beemster Boor. Sage Bauman is Bloomberg's head of Podcasts. If you liked this episode, make sure to subscribe, and review The Big Take. Wherever you listen to podcasts, it helps people find the show. Thanks for listening. We'll be back tomorrow.

This is the Big take from Bloomberg News. I'm David Gura. This episode was produced by David Fox. It was edited by Aaron Edwards and Amanda Colson Hurley, with special thanks to Leonardo Nicoletti. This episode was mixed by Alex Segura. It was fact checked by Adriana Tapia. Our senior producer is Naomi Shavin. Our senior editor is Elizabeth Ponso. Our executive producer is Nicole Beemster Boor. Sage Bauman is Bloomberg's head of Podcasts. If you liked this episode, make sure to subscribe, and review The Big Take. Wherever you listen to podcasts, it helps people find the show. Thanks for listening. We'll be back tomorrow.