The National Flood Insurance Program (NFIP) is expected to face total losses between $8.2-10.5 billion for 2024, leading to a loss ratio above 200 percent before accounting for loss adjustment expense, according to a new report.

Private flood insurer Neptune Flood released an analysis of the aftermath of Hurricanes Helene and Milton, highlighting the challenges and systemic issues in the U.S. flood insurance market.

This is the first issue created by the Neptune Flood Research Group, a newly formed team of analysts that will provide periodic commentary and insights on the flood insurance market.

Hurricanes Helene and Milton caused significant damage, with Helene resulting in over 55,000 NFIP claims and projected losses between $6-7 billion, while Milton resulted in over 18,000 claims with projected losses of $1.5-2.5 billion.

The numbers suggest that the NFIP’s payout for Helene will eclipse Ian’s $4.9 billion loss, the report stated.

Milton’s losses will likely place it in the NFIP’s top ten losses.

Pinellas County, Fla. has seen over 22,000 NFIP claims from Helene alone, with an additional 2,000 NFIP claims from Milton. The county saw over 40,000 buildings damaged in the storms, highlighting both the significant flood damage and extensive uninsured risk in the area.

The private flood insurance market in Florida has also experienced considerable losses, with projections indicating total losses of over $500 million from Hurricanes Helene and Milton, the report outlined.

The reliance on outdated flood maps remains a significant challenge, with many homeowners unaware of their true flood risk.

Coupled with the limited covered the NFIP provides – $250,000 for building coverage and $100,000 for contents on residences, with no coverage for temporary living expenses, swimming pools, or detached structures – it has led homeowners to seek coverage in the private market.

Since the implementation of Risk Rating 2.0, the NFIP has seen a decline in its insured base, with many homeowners opting for private flood insurance due to rising premiums and coverage limitations, according to Neptune Flood.

The limitations of the NFIP have driven policyholders to seek more comprehensive private insurance options, which offer higher coverage limits and more flexibility.

The private insurer indicated that to address the challenges of the flood insurance market it will require collaboration among various stakeholders, increasing public awareness and adequate insurance coverage.