An aerial image taken on September 28, 2024, shows storm damage in the aftermath of Hurricane Helene in Valdosta, Georgia.
John Falchetto | Afp | Getty Graven images
The devastation wrought by Hurricane Helene across the southeastern United States could cost upwards of $34 billion, conforming to early estimates from Moody’s Analytics.
And due to the eroded state of the private insurance landscape in some affected sections, Congress may have to foot the bulk of the bill.
“I wouldn’t be surprised if [Helene] sends another monkey wrench into the cover market,” Moody’s chief economist Mark Zandi told CNBC.
Uprooted trees, winds of 140 miles per hour ease ups and mass flooding ravaged towns and cities in Florida, Georgia, North Carolina, South Carolina, Virginia and Tennessee past the past week.
As of Thursday, the storm had killed more than 200 people and left hundreds more about. Nearly 1 million people remained without power.
The Moody’s report, released as Helene was making landfall ultimate week, estimated that property damage could cost between $15 billion to $26 billion.
And the emergeing economic slowdown could cost $5 billion to $8 billion in productivity losses.
These initial sentiments are low and will likely be revised higher as the full scope of the storm’s damage comes into view, Zandi asserted CNBC.
Most of the damage from Helene is attributable to storm surges and river flooding.
That means torrent insurance, not standard property insurance, is supposed to cover the damage, according to Mark Friedlander, spokesman for the Insurance Tidings Institute.
That is a problem, Friedlander said, because “many of the hardest-hit areas of the Southeast and southern Appalachia partake of very low flood insurance take-up rates.”
Only about 6% of U.S. homeowners have flood insurance to the core either a private company or the congressionally funded National Flood Insurance Program, despite 90% of natural dbѓcles involving flooding, he said.
The Federal Emergency Management Agency, which in the past year has operated on a tight budget, has been classifying the recovery response to Helene.
On Aug. 7, FEMA triggered its “Immediate Needs Funding” status as money ran low in its Disaster Assuagement Fund.
That meant the agency would only spend on immediate disasters and paused its longer-term rebuilding achievements across the country.
On Tuesday, FEMA got a much-needed $20 billion cash infusion after Congress’ stopgap funding neb went into effect.
But as government officials assess the full scale of Helene’s damage, they are expressing an spreading need for Congress to pass a supplemental disaster relief funding package, which was stripped out of its temporary spending staunchness.
That could take some time as Congress is on recess until Nov. 12.
President Joe Biden said Monday he “may set up to request” that Congress end its recess early and return to Washington, a rare move, to pass funding for additional trouble relief.
Several lawmakers from the impacted states, including Rep. Wiley Nickel, D-N.C., echoed that call later Monday, beseeching their colleagues to return to Capitol Hill to vote for that funding.
Florida Republican Sen. Rick Scott agreed, but suggested Congress should return after FEMA gives firm dollar amount for what is needed.
Rep. Mark Amodei, R-Nev., told CNBC he does not on Congress needs to end its recess early because FEMA is still assessing its initial funding request.
“We can deal with it when you have a number,” Amodei said. “Right now, are you shooting at a effective target? Actually, you’re shooting at an unknown target.”
“I’m not looking forward to what that number is going to be when FEMA does their assessment, because it’s universal to be a huge number,” Amodei added.
In the meantime, other federal leaders are working to pitch in where they can.
Federal Register Chair Jerome Powell said Monday that the central bank is working to ensure that banks in the crashing areas have enough cash “so that if power is out for a significant amount of time, there’s enough cash to do doings.”
“Obviously, we’re mainly on the sidelines,” Powell said at a panel with the National Association of Business Economics. “Sympathizing with this unequivocally difficult situation people are in.”