Moody’s RMS estimates $5B-7B in economic losses from California floods

Moody’s RMS estimates that the recent California floods caused total economic losses of between $5 billion and $7 billion, and insured losses of between $500,000 and $1.5 billion, including the National Flood Insurance Program and the private flood market damage is included.

The estimate reflects the effects of inland flooding for the US and includes damage to infrastructure.

The overall economic loss estimate is based on an event reconstruction using Moody’s RMS US Inland Flood HD model and reflects property damage, material and business interruption across residential, commercial, industrial, automobile and infrastructure properties.

Beginning on December 26, 2022, a series of extreme tropical cyclones impacted the US West Coast, resulting in heavy rainfall, swollen rivers, flash floods, levee breaches, mudslides, downed trees debris flows, and heavy snowfall occurred at higher elevations. with some wind damage.

The rainfall associated with these cyclones was exacerbated by a band of high atmospheric water vapour, also known as an “atmospheric river”.

The intensity of rainfall in California was so high that several locations in central California recorded 3-week record rainfall and some locations received their annual average rainfall in less than a month.

Infrastructure damage was widespread within estimates of economic losses. State highways and local roads bore the brunt of the damage due to a combination of flooding and mudslides. High water velocities, saturated soil and heavy winds had uprooted trees that were stressed before drought conditions, causing damage to power networks as well as cars and property.

A relatively small portion of economic damage is expected to be covered by insurance. Less than 2% of households in California have flood insurance. As of August 2022, there were only 193,281 residential NFIP policies, according to Moody’s RMS.

subject
California
profit loss
Flooding