Commercial lines will be primary driver in flood losses from Matthew

Losses to commercial lines will be the primary driver of the total insured losses from floods resulting from Hurricane Matthew, according to Tom Sabbatelli, hurricane risk expert at RMS.

The losses from commercial lines will be predominantly through multi-peril or all-risk policies, RMS suggests.

RMS expects the contribution from residential claims will be limited as a large proportions of properties are covered by the National Flood Insurance Program (NFIP).

“As of July 31, 2016, there were approximately 417,000 NFIP policies in-force in Georgia, South Carolina, and North Carolina. Penetration of NFIP coverage varies significantly by distance to the coastline,” said Sabbatelli.

“In coastal regions it can be as high as 25 percent in some areas, while inland participation can be less than 1 percent. This means that although much of the storm surge-driven coastal flood losses will be covered to some extent by the NFIP, many flood-related losses further inland are expected to be uninsured.”

Hurricane Matthew deteriorated into a post-tropical cyclone and left the East Coast over the weekend, although flooding continues over portions of eastern North Carolina, which the National Hurricane Center said received record-breaking levels of rainfall.