They Say, Hearsay
We live in South Florida. Hurricane Wilma was a Category 2 stormwhen it hit here and we didn't have any flooding, so that type ofstorm is clearly not much of a threat. It bugs me that we have topay for something that might happen in the future, and we don't getour money back when it doesn't. I want to drop my flood insuranceand can't think why I should keep paying for it if my neighborhoodhas never been flooded.

We Say
Experience is not always the best teacher. It may come in handy ifthe second lesson closely mirrors the first, but life (and MotherNature) seldom works that way. One's hurricane experience canactually have limited value—or worse, it can make one complacentand over confident. A "been there, done that, got the T-shirt"mindset is compounded as time puts more distance between stormexperiences, causing people to forget what prompted them topurchase optional coverage such as flood insurance in the firstplace. They may need some stark reminders.

More people in the U.S. have been killed by storm surge-inducedflooding in hurricanes than all other hurricane-related threatscombined since 1900, according to the National Oceanic and AtmosphericAdministration (NOAA).  And yet, every major floodbrings stories about people who let their flood insurance policyexpire or never believed they needed the coverage. People simply donot understand flood risk, as evidenced by a newspaper headlineabout the devastating floods this spring in South Dakota. It read:"In the Flood Zone, but Astonished by High Water." The trouble withfacts, such as knowing you live in a flood zone, is that ignoringthem has consequences.

The Wharton Centerfor Risk Management and Decision Processes determined that themedian tenure of a flood policy is 2 to 4 years, yet Floridianstend to keep a flood policy for an even shorter period. Whartonanalyzed the entire portfolio of the National Flood InsuranceProgram over a 10-year period to determine how to tailor incentivesthat would encourage people to keep flood policies longer. Thelikelihood of more extreme catastrophes in the future might beincentive for some, but we further incentivize people by showingthem how to lower their flood insurance costs with deductibleoptions, as the study pointed out.

Wharton's analysis of the more than 1 million flood insurancepolicies in force in Florida in 2005 showed that 98.3 percent ofcustomers chose a deductible lower than the maximum amount; 80percent of policyholders chose the lowest possible deductible of$500. The standard $500 deductible was discontinued in 2009 forhigh-risk flood zones; the current standard deductible is $1,000.It is a safe guess that people continue to let their deductibledefault to this new number and that they would appreciate knowinghow much they could save by raising it. Higher deductibles on floodpolicies may be the key to convincing people that hanging on to aflood policy is in their best interest given the fact that floodrisk has not diminished and, in fact, may be increasing.

We have been schooled by decades of exerciseswith the familiar Saffir-Simpson scale, and it may have had anunintended effect of masking flood risk. Since 1975, theSaffir-Simpson scale, with its five distinct categories forcharacterizing hurricane wind damage, has been the guidepost bywhich local authorities and coastal dwellers decide how to respondto an approaching storm. It has been a good tool for alertingpeople to possible impacts from storm-force winds, but it overlooksother hurricane-related impacts that are more devastating, such asstorm surge and tornadoes. A newly patented hurricane scale hopesto change that.

Called the Integrated Kinetic Energy scale (IKE), it predictsthe potential destruction for both wind and storm surge. Dr.Timothy Reinhold, senior vice president of research and chiefengineer at the Insurance Institute for Business & Home Safety (IBHS), andDr. Mark Powell, an atmospheric scientist with NOAA's AtlanticOceanographic and Meteorological Laboratories, were awarded the IKEpatent, which differentiates between the risk perception of windand storm surge to more completely assess a hurricane's destructivepotential.

While a surge height estimate was added to theoriginal  Saffir-Simpson wind scale, the National Hurricane Center (NHC) tooksteps 2 years ago to make it clear that the Saffir-Simpson stormclassification in its warnings is only based on maximum windspeeds. It is producing separate estimates of surge in feet forwarnings. The estimated surge height depends on local conditionsfor which the NHC gives the following example: If 2008's HurricaneIke made landfall in Palm Beach, the resulting storm surge wouldhave been only 8 feet, rather than the 20 feet that occurred whereIke actually made landfall on the upper Texas coast. These widedisparities of surge impacts are due to differences in ocean/gulfdepth and the shape of the ocean/gulf floor.

The Gulf waters off Texas are shallow, which enhances stormsurge, while the deep ocean off southeastern Florida inhibitssurge. However, 8 feet of water is no small amount, so the NationalWeather Service (NWS) will continue to educate people about theinundation expected at coastal and inland locales by providingestimates of surge in feet.

The IKE scale, while not an official NWS product, will be put tothe test and then hopefully refined by continuing research. Itsbest use likely will be as an early warning of surge potential.Final surge estimates will always depend on local conditions andare best estimated by more sophisticated models that include wavesetup, the depth and shape of the ocean/gulf floor, and theroughness of the land that is impacted.

When my own flood policy was coming up for renewal, I received aletter from FEMA that was direct and to the point. It stated thatthe risk of flooding is as real today as it was when my floodpolicy was first purchased. True enough. It is also true that stormsurge does not correlate neatly to wind speeds, does not followproperty boundaries, and that most of Florida is built over swampland that Mother Nature may want to reclaim, at least for a shortwhile after a heavy downpour. Flood insurance should be part ofthis reality over the long term, not merely for a 2 to 4-yearperiod.