South Carolina's economic losses from the historic and deadly flooding will easily top $1 billion, experts say, but the looming issue for the state and federal government is that most of it will be uninsured.
More than 2 feet of rain fell in some spots, prompting descriptions of a "1,000-year flood" — not because it historically happens that infrequently, but because the odds of it are so small that statistically it should only happen once a millennium.
The problem is that almost all the damage can be clearly attributed to flood waters, in a state with nearly 2.2 million housing units and fewer than 200,000 flood insurance policies.
"[G]iven the enormity of the event and the scope of damage incurred to residential and commercial exposures, vehicles and infrastructure, it is expected that overall economic damage will easily exceed $1 billion," reinsurance broker Aon Benfield said in a report, while cautioning that it was too soon to make more specific loss forecasts.
But the brokerage also offered an ominous warning: "Based on current active National Flood Insurance Program (NFIP) policies in place, it is expected that most of the residential damage will not be covered by insurance."
Residential flood insurance in the United States is almost exclusively the province of the Federal Emergency Management Agency's National Flood Insurance Program.
Even though South Carolina ranks as one of the most insured states in the program, huge gaps remain. In Charleston alone, Census data record nearly 144,000 households — but the NFIP says it has just under 24,000 policies in force there.
The head of the South Carolina National Guard reportedly referred to the storm as a "Hugo-level event," a reference to the 1989 hurricane that caused $9.5 billion in economic losses at the time ($17.8 billion in today's dollars, according to Aon).
The insured losses were only about half of that, though, given that so many people were not covered.
FEMA grants will help some people, but many others will have to shoulder the costs on their own. The agency has already launched some emergency programs for the state.
"This will not be a short or easy recovery, but we will get through it, and get through it together," Gov. Nikki Haley said in a statement Monday.