Aerial photo taken on September 28, 2024 shows storm damage from Hurricane Helen in Valdosta, Georgia.
John Falchetto | AFP | Getty Images
Early estimates suggest that damage caused by Hurricane Helen to the southeastern United States could be more than $34 billion. Moody’s analysis.
Congress may also have to foot the bulk of the bill, as private insurance conditions have worsened in some affected areas.
“I wouldn’t be surprised if that were the case. [Helene] It sends another monkey wrench into the insurance market,” Moody’s chief economist Mark Zandi told CNBC.
Over the past week, uprooted trees, 140 mph winds and massive flooding have devastated towns and cities in Florida, Georgia, North Carolina, South Carolina, Virginia and Tennessee.
As of Thursday, the storm had left more than 200 people dead and hundreds more missing. Nearly 1 million people remained without power.
A team works in the affected area after Hurricane Helen struck western North Carolina and Asheville, U.S., September 30, 2024, in Asheville.
Peter Zai | Anadolu | Getty Images
A Moody’s report released when Helen came ashore last week estimated that property damage could be between $15 billion and $26 billion.
And the resulting economic slowdown could result in productivity losses of $5 billion to $8 billion.
Zandi told CNBC that these initial estimates were low and would likely be revised higher as the full extent of the storm’s damage becomes clearer.
Most of Helen’s damage is due to storm surge and river flooding.
That means flood insurance, rather than standard property insurance, is supposed to cover the loss, said Mark Friedlander, a spokesman for the Insurance Information Institute.
Friedlander said this is a problem because “many of the hardest-hit areas in southeastern and southern Appalachia have very low flood insurance coverage.”
A home along the Broad River is affected by Hurricane Helen on October 1, 2024 in Batcave, North Carolina.
Sean Rayford | Getty Images
Even though 90% of natural disasters involve flooding, only about 6% of U.S. homeowners purchase flood insurance through private companies or the Congressional-funded National Flood Insurance Program, he said. .
The Federal Emergency Management Agency, operating on a tight budget for the past year, has been coordinating the recovery response to Helen.
On August 7, FEMA activated “Emergency Needs Fund” status due to insufficient funds in the Disaster Relief Fund.
This meant that government agencies only spent on immediate disasters and suspended long-term rebuilding efforts nationwide.
On Tuesday, FEMA got a much-needed $20 billion cash infusion after Congress’s emergency funding bill took effect.
But as government officials assess the full extent of Helen’s damage, they have expressed an increasing need for Congress to pass an additional disaster relief funding package that was removed from the extraordinary spending resolution.
That could take some time, as Congress is in recess until Nov. 12.
In an unusual step, President Joe Biden said Monday that he “may have to” require Congress to end its recess early and return to Washington to pass additional disaster relief funding. Ta.
U.S. President Joe Biden (2R) participates in a tour and information session of areas affected by Hurricane Helen in Keaton Beach, Florida, on October 3, 2024.
Mandel Gunn | AFP | Getty Images
Several members of Congress from the affected states participated, including members of Congress. wiley nickelD.N.C. echoed that call late Monday, urging his colleagues to return to the Capitol to vote on that funding.
Sen. Rick Scott, R-Florida, agreed, but said Congress should come back after FEMA comes up with a solid dollar amount for what’s needed.
Rep. Mark Amodei, R-Nevada, told CNBC he doesn’t think Congress needs to end its recess early because FEMA is still evaluating its initial funding request.
“If you know the number, you can deal with it,” Amodei said. “Now you’re shooting at a moving target? Actually, you’re shooting at an unknown target.”
“I’m not looking forward to seeing what the numbers will be when FEMA does their assessment, because it’s going to be a huge number,” Amodei added.
In the meantime, other federal leaders are working to help as much as possible.
Federal Reserve Chairman Jerome Powell said on Monday that the central bank should ensure that banks in affected areas have enough cash “so that they have enough cash to trade even if the power goes out for a significant period of time.” He said he is working on it.
“Obviously, we’re largely on the sidelines,” Powell said during a panel discussion at the National Association for Business Economics. “I sympathize with this very difficult situation that people are in.”
