Note that ARkStorm – California’s Big Flood – would be a huge public disaster $725 billion, but as an insurance event, $30 billion or less. That would be the second biggest cat in U.S. history – smaller than Hurricane Katrina, slightly bigger than Hurricane Andrew.
The scary thing is that, as far as I know, no company has even considered a disaster like this before.
Details, via U.S. Geological Survey:
- Serious flooding occurs in Orange County, Los Angeles County, San Diego, the San Francisco Bay area, and other coastal communities.
- Windspeeds in some places reach 125 miles per hour, hurricane-force winds. Across wider areas of the state, winds reach 60 miles per hour.
- Hundreds of landslides damage roads, highways, and homes. Property damage exceeds $300 billion, most from flooding.
- Demand surge (an increase in labor rates and other repair costs after major natural disasters) could increase property losses by 20 percent.
- Agricultural losses and other costs to repair lifelines, dewater (drain) flooded islands, and repair damage from landslides, brings the total direct property loss to nearly $400 billion, of which $20 to $30 billion would be recoverable through public and commercial insurance.
- Power, water, sewer, and other lifelines experience damage that takes weeks or months to restore.
- Flooding evacuation could involve 1.5 million residents in the inland region and delta counties.
- Business interruption costs reach $325 billion in addition to the $400 property repair costs.
- The final tab: on the order of $725 billion, which is nearly 3 times the loss deemed to be realistic by the ShakeOut authors for a severe southern California earthquake, an event with roughly the same annual occurrence probability.
Abstract and full report are here.