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    Black Communities Face Rising Flood Risk—Are Your Insureds Covered?

    You don’t have to look far for examples of flooding and other natural disasters disproportionately impacting communities of color.

    When Hurricane Harvey hit Houston in 2017, it left over 200,000 damaged homes in its wake and caused $125 billion in total damages. Recovery efforts were inconsistent along racial lines. According to a Kaiser Family Foundation report, Black families had a harder time getting disaster recovery relief. The report found that 34% of white residents had their applications for FEMA assistance approved compared to 13% of Black residents.

    The disaster also created greater levels of income disruption for Black people. According to the report, 31% of white Houstonians experienced an income disruption after the hurricane compared to 65% of Hispanics and 46% of Black residents.

    When Hurricane Katrina devastated New Orleans in 2005, over half of the zip codes that suffered the most extensive flood damage had populations that were at least 75% Black.

    According to Scientific American, “Flooding in the U.S. disproportionately harms African American neighborhoods…Urban flooding and its disproportionate impact on minorities and low-income residents are becoming a growing concern as climate change intensifies floods.”

    In this blog post, we’ll review some key highlights from a recent study published in the journal Nature Climate Change that identified a troubling rise in inequitable patterns of flood risk for people of color.

    We’ll also discuss the importance of sharing information about affordable, accessible flood insurance coverage with your homeowners’ insurance clients from all ethnic backgrounds.

    Experts Predict a 40% Increase in Flood Risk for Black Communities

    According to an NPR report on the study cited above, “Right now, floods disproportionately affect communities in Appalachia and the Northeast, where the proportion of Black residents is generally low. But in the coming decades, the areas with the highest flood risk will shift south. People living in Texas, along the Gulf Coast, and the Southeast will suffer more damaging floods, and communities where Black people live will see a disproportionate rise in flood risk.

    Overall, experts with the study predict a 40% increase in flood risk in communities where at least one-fifth of the population is Black.

    The Importance of Access to Affordable Flood Insurance

    Despite the steeply rising flood risk for communities of color, there is a large flood insurance coverage gap for Black homeowners.

    Take, for example, Canarsie, NY. The predominately Black neighborhood near Brooklyn was viewed as a bastion of homeownership for people of color, but the area was devastated by Hurricane Sandy in 2012 and many residents were uninsured.

    According to the Center for Public Integrity, “FEMA flood maps at the time of the storm, which were based on historical experience, classified less than 40 of Canarsie’s 12,000 buildings as high flood risk, which mortgage lenders typically require to carry flood insurance. Revised figures now suggest more than 5,000 buildings are at risk.”

    FEMA has recently adopted new procedures for rating flood risk for insurance pricing purposes. The new process is meant to more accurately reflect risk for property owners and distribute the cost of insurance for potential flood damage more equitably. However, for many, it will mean increased flood insurance premiums through the National Flood Insurance Program (NFIP).

    According to the article above, “New York City officials warn that skyrocketing flood insurance premiums could trigger a foreclosure crisis in neighborhoods like Canarsie…Annual premiums in Canarsie—now an average of $600—could jump to a range of $3,000 to $6,000 as soon as 2022 and become mandatory for more residents. That expense could be out of reach for many in Canarsie already struggling to keep up with housing costs.”


    The example of Canarsie, NY illustrates the dire need for more equitable programs that limit flood risk for everyone. According to Gizmodo, “FEMA seems to know this because, for years, it has been working on an affordability framework aimed at ensuring that all communities have access to flood insurance. Under the program, officials would consider households’ socioeconomic status in particular areas and vary the price of the insurance based on residents’ means. They would also up their outreach in particularly vulnerable areas which may not have local officials who are focused on flood planning.”

    The need for accessible, affordable flood insurance options is important for everyone, but it’s becoming increasingly important for people of color. You can help by sharing this information with your homeowners’ insurance clients to ensure they’re aware of the issue and have the opportunity to obtain proper flood insurance coverage.

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    Tyreo Harrison

    As Executive Vice President, Lending & Insurance Solutions, Ty Harrison leads teams of lending and insurance professionals that are dedicated to delivering value-added programs, services and technology tailored to address the needs of lenders, loan servicers, portfolio managers, mortgage brokers, insurance agents and insurance brokers.

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