The $200 Billion Disaster Hurricane Helene Didn’t Warn You About!

Hurricane Helene has left a devastating impact on the mountainous regions of North Carolina and Tennessee, but the true extent of the destruction is still unfolding. What is already clear, though, is that this storm ranks as one of the most deadly and destructive in modern U.S. history. As of last Friday, reports confirmed at least 180 deaths, along with the destruction or severe damage of thousands of homes and other structures.

AccuWeather released a preliminary damage estimate on Thursday, marking the financial cost of Helene’s havoc at an astounding $225 to $250 billion. This figure more than doubles the initial estimates and far surpasses the damages caused by other major hurricanes, like Hurricane Sandy in 2012 and Hurricane Harvey in 2017. The astronomical cost factors in the rebuilding of homes, businesses, and infrastructure, along with the economic toll of lost wages and productivity during the anticipated lengthy recovery.

What sets Hurricane Helene apart from other recent storms is not just its immense damage, but the fact that most of the losses won’t be covered by insurance. Despite causing widespread destruction through flooding—an event typically covered by government-run flood insurance—very few residents in the southern Appalachian region hold these policies. Even those living in federally designated flood zones were largely uninsured, leaving many victims in North Carolina and Tennessee without guaranteed financial assistance from either public or private sources. This stands in sharp contrast to disasters like Hurricane Ian in 2022, where residents typically had standard homeowner’s insurance to cover wind damage or flood insurance for low-lying coastal areas.

“A whole bunch of these [mountain] communities don’t have access to any of these things that can help you rebuild,” said Carolyn Kousky, vice president for economics and policy at the nonprofit Environmental Defense Fund. “It’s going to be really heartbreaking. It’s going to be a very long time before they can rebuild.”

The catastrophe modeling firm Karen Clark & Company estimated that insured damages from Helene will likely total around $6.4 billion—a relatively small figure given the storm’s force, which included 140 mph winds. For comparison, this is less than half the insured losses from the 2018 California wildfires and only a fraction of the damages caused by Hurricane Ian.

The broader trend of rising homeowner’s insurance premiums has been a significant issue across the U.S., as insurers face growing costs from natural disasters, construction, and risky developments. Premiums have been spiking in states like North Carolina, where the insurance commissioner recently approved a double-digit hike. However, despite the scale of Helene’s damage, experts predict it won’t lead to an insurance market collapse like those seen in California and other disaster-prone states.

“I’m not sure it’s going to have a big impact on the insurance market, because from an insurance industry perspective, this is not a very large loss,” noted Karen Clark, co-founder of Karen Clark & Company.

The reason for this? Most private insurers stopped offering flood coverage decades ago, after catastrophic floods along the Mississippi River. Today, flood insurance is primarily provided by the National Flood Insurance Program (NFIP), a federal initiative that has struggled to keep up with rising disaster costs. FEMA has spent years trying to expand NFIP enrollment, especially for homes far from the coast, but even with government subsidies, the cost remains too high for many. For example, in Asheville, North Carolina—one of the hardest-hit areas—fewer than 1% of residents hold flood insurance policies.

Even with the low participation, Helene could still result in one of the largest FEMA flood insurance payouts in recent years. However, the global reinsurance giant Swiss Re has confirmed that most of the people affected by the storm won’t see any insurance compensation. “Sadly much of the damage from these devastating floods will not be covered by insurance,” said Monica Ningen, head of Swiss Re’s U.S. property division, adding that the lack of coverage “will make the task of rebuilding the communities impacted all the more difficult.”

For most homeowners, this means they’ll be left to rebuild on their own. FEMA may provide a few thousand dollars to some victims for repair costs, and the Small Business Administration could offer low-interest loans for rebuilding efforts. The Department of Housing and Urban Development (HUD) may also step in, as it has in the past, with long-term recovery aid for housing development. However, as Kousky pointed out, these programs were not designed to replace insurance and will likely fall far short of covering the actual cost of rebuilding.

“These programs were intentionally designed not to replace insurance,” said Kousky. “It’s really limited.”

Despite the attention Hurricane Helene has received, Kousky remains doubtful that the storm will bring any lasting changes to U.S. disaster policy. She fears that the cycle of media coverage and inadequate government responses will continue, leaving vulnerable communities to bear the brunt of the next disaster.

“There’s been so many events, they get attention and seem to be wake-up calls, and our response has been insufficient every time,” she said.