Flood Insurance on the Rise, but Property Owners Aren’t Worried
Insurance has been cited as the great savior of coastal commercial real estate, keeping property owners profitable in areas with high flood risk. Experts have said a shift in insurance premiums, deductibles and availability would be the straw that drives investors away from assets in such areas.
Now, two years after Hurricane Harvey deluged Houston with catastrophic flooding that became the second-costliest natural disaster in U.S. history, those changes are starting to happen.
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“If we don’t change, we are going to repeat and have the same results every time,” Blank Rome LLP principal Alan Rubin said.
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Property owners, especially those in flood-prone areas, will have to calculate the potential loss, Rubin said. Some precautions owners can take include identifying the properties damaged in Harvey and investing in flood mitigation projects. Federal and local officials could fund loans and grants to incentive flood mitigation projects. But an all-out ban on development within a certain distance from the coastline or in flood zones may be the only true deterrent of high-risk projects, he said.
“Flood Insurance on the Rise, But Property Owners Aren’t Worried,” by Tierra Smith was published in Bisnow on August 6, 2019.