California's Pajaro River overcame its levee, causing a partial collapse, according to CoreLogic, which reported 5,895 residential structures in Pajaro and Watsonville, California, were at risk of flooding from the March 10, 2023, event. The structures' combined reconstruction value (RCV) is estimated at $2.88 billion. The levee, which has been tested on several occasions since its construction in 1949, failed once before due to flooding in 1995. According to the National Levee Database, flooding had been a frequent occurrence in the region. CoreLogic noted its estimate represents the cost to rebuild a home after its complete destruction, and that only a portion of structures in Pajaro and Watsonville were flooded. The projections include all of Pajaro and portions of Watsonville with a flood risk score of at least 30, indicating a moderate flood risk. According to CoreLogic data, most structures in the area have a moderate flood risk score. However, around 2,230 buildings in the region did have a "very high" flood risk score. The elevated flood risks in Pajaro and Watsonville are because of the flat landscape of the Pajaro River's floodplain.

Private flood dominates in California

According to AM Best, just 2% of Californians carry flood insurance. The state also has the largest private flood insurance market, with 40% of policies written by the private market. California accounts for around 4% of National Flood Insurance Program (NFIP) policies. "Homes in California protected by NFIP insurance may still be underinsured, given that NFIP insurance is limited to $250,000 per residence, well below California's median home value of nearly $685,000, the second-highest in the country," Christopher Graham, senior industry analyst, AM Best said in a release. "Many homes covered by the NFIP would benefit from an excess policy above the NFIP coverage limit, so opportunities abound for private flood insurers willing to take the risk." The rating agency noted that prior to the deluge of precipitation California has seen since the start of the year, the state had been profitable for those writing private flood. In 2021, private flood insurers had a loss ratio of 9.5 in California; nationwide the loss ratio was 43.3. Related:

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