© Reuters
Storms

Hurricane Harvey: Record-breaking floods inundate Houston

Harvey was the wettest tropical cyclone ever to hit the USA. In parts of Texas, unprecedented flooding occurred. The direct economic losses are likely to be as much as US$ 85bn, which would make Harvey the second-costliest hurricane on record after Katrina. Many private households face a sizeable insurance gap.

The eighth named storm of the 2017 Atlantic hurricane season developed from a tropical wave on 17 August east of Barbados. Harvey traversed the Lesser Antilles as a tropical storm, but weakened to a tropical depression thanks to unfavourable conditions in the Caribbean. After crossing the Yucatán Peninsula, it began to be influenced by a warm water area in the Bay of Campeche. This had separated from what is known as the “loop current”, a warm ocean current between Yucatán and Cuba. The resulting increase in convection quickly fed Harvey with new energy, allowing it to develop to a Category 4 hurricane within 48 hours.

Losses from Hurricane Harvey

The eighth named storm of the 2017 Atlantic hurricane season developed from a tropical wave on 17 August east of Barbados. Harvey traversed the Lesser Antilles as a tropical storm, but weakened to a tropical depression thanks to unfavourable conditions in the Caribbean. After crossing the Yucatán Peninsula, it began to be influenced by a warm water area in the Bay of Campeche. This had separated from what is known as the “loop current”, a warm ocean current between Yucatán and Cuba. The resulting increase in convection quickly fed Harvey with new energy, allowing it to develop to a Category 4 hurricane within 48 hours.

Cyclone with extreme precipitation

Following landfall in Texas, parts of Harvey’s circulation remained over the warm waters of the Gulf of Mexico, bringing large quantities of moisture to the mainland. In many parts of southern Texas, the aggregate rainfall exceeded 1,000 mm. The peak value was measured at over 1,600 mm near Beaumont, roughly 120 km east of Houston. But the Lone Star State’s largest city also experienced rainfall of more than 750 mm over a wide area. This makes Harvey the wettest tropical cyclone in the USA since records began. In some cases, the return periods for the quantities of rain experienced were in the 1,000-year range. Much of Harris County saw more than a 1-in-100-year volume of rain.
 
While the amounts of rain were exceptional, the situation was compounded by local conditions. The area of the Texas coast where Harvey hit is extremely flat: there is only a 15–20 metre difference in elevation between Houston and the coast 40 km away at Galveston Bay. The rivers in the district around Houston have only a gentle incline and a low discharge capacity. Houston is also built on alluvial soil, and as the result of groundwater abstraction, the ground there is sinking – by up to 6 cm per year in places.

Wind speeds of Hurricane Harvey

All this set the scene for a perfect storm. In the days after landfall, more than 80 gauge stations around Houston reported flooding, 42 of them severe flooding. Record levels were measured at a large number of river gauges. The floods were exacerbated by the fact that water had to be released from several reservoirs to prevent dams bursting. Approximately 25–30% of Harris County was under water.

Harvey is the second costliest hurricane after Katrina

The deadly combination of severe and extensive flooding in a highly developed economic region – with 6.6 million residents, Houston is the fourth largest city in the USA – resulted in enormous losses. More than 200,000 homes were damaged or destroyed, and over 250,000 vehicles were damaged. Harvey flooded 800 sewage plants. At least 82 people were killed. Production of oil and gas in the region had to be cut back by about 25%.
 
With direct losses of US$ 85bn, Harvey is the second-costliest cyclone in US history after Hurricane Katrina in 2005. Texas anticipates costs of US$ 180bn to repair the damage and prevent such disasters in the future. This compares with insured losses of between US$ 25bn and US$ 30bn. Particularly in private households, there is a substantial gap between insured and economic losses.

Insurance cover limited

Flooding in the USA is not covered in standard private-residence policies. But this is where the National Flood Insurance Program (NFIP) comes in. It provides private individuals with government insurance cover – albeit with limitations. The programme is only compulsory for properties with a mortgage that are located within a 1-in-100-year flood zone. The premiums are relatively high for what is a limited scope of cover. For example, payments are capped at US$ 250,000 for buildings, and US$ 100,000 for contents, and basements are not covered under the policy. Due to these somewhat unattractive conditions, the number of NFIP policies has fallen in recent years. In Harris County around Houston, only one in six homeowners has insurance cover for flooding. In addition, the flood zones for which NFIP protection is compulsory relate river flooding only. But the floods triggered by Harvey mainly affected areas far from any body of water. Lax building regulations did the rest: houses do not have to be built at higher levels, and insufficient consideration was given to the flood risk when planning residential developments. In the course of the construction boom in Houston, large areas have been sealed up in the last few years that could otherwise have helped in soaking up and discharging water, thus reducing the flooding hazard.

Rainfall of Hurricane Harvey

Better models needed for flood risks

Hurricane Harvey demonstrated once again that floods not only account for a significant proportion of total losses from tropical cyclones, but can actually make up the bulk of such losses. Up until now, these have only played a minor role for the insurance industry because the risk – where applicable – was covered by the federally run NFIP. This is also reflected in the options for modelling this risk. Numerous solutions and tools delivering an improved risk assessment have only been developed over the last few years. These range from zoning solely for floods that can be used for risk selection and rating, to fully probabilistic models to calculate loss accumulations and reinsurance requirements. However, hurricane models only simulate losses from wind and storm surge – but not losses from flooding resulting from torrential rain. They are not suited for mapping the interaction between these three risks. On the other hand, pure flood models generally do not map tropical cyclones, which means that one component of the risk is missing.
 
If the insurance industry is to expand flood insurance in the USA and tap into the new business potential this will bring, it will at least need to include flooding in its hurricane models.

Further Information
Munich Re Experts
Tobias Ellenrieder
Senior Consultant Flood Risks
No comments yet
Write a comment
* required fields

Print
This may interest you