Moody's Warns US Faces $375 Billion in Uninsured Flood Losses From a 1-in-100-Year Event

The United States is facing a widening and increasingly dangerous gap between its growing flood risk and the take-up of flood insurance, according to a new interactive whitepaper from Moody's, prominently featured in Insurance Journal's June 22, 2026 issue. The analysis estimates that a 1-in-100-year flood event could expose the nation to more than $375 billion in aggregated uninsured residential flood losses, with a national protection gap exceeding 65%.

Authored by Jennifer Chang, Senior Vice-President for Sustainable Finance Credit at Moody's Ratings, and Firas Saleh, Director of North American Flood Models, the report uses the Moody's RMS US Inland Flood HD model to evaluate residential flood exposure at the county level across three scenarios: a 1-in-100-year flood, a more extreme 1-in-500-year flood, and a 1-in-100-year flood under an intermediate-emissions pathway projected to 2050.

A central finding is that the risk is highly concentrated yet broadly distributed. While roughly 90% of US counties are exposed to some level of flood risk, fewer than 2% of counties — spread across 11 states — carry 65% of the nation's uninsured loss exposure. Counties with potential uninsured losses exceeding $5 billion are clustered in Florida, Louisiana, South Carolina, and Texas — all states Moody's classifies as having moderate-to-high credit exposure to physical climate risk. In rarer 1-in-500-year events, total uninsured exposure could triple to more than $1 trillion, with the protection gap exceeding 70% and high-loss counties extending into inland states like Pennsylvania and Illinois.

A key structural driver of the protection gap is FEMA's Special Flood Hazard Area (SFHA) maps, which are primarily based on riverine flooding and generally do not account for storm surge, sea level rise, or extreme precipitation. Since mortgage underwriters use these maps to determine whether a property must carry flood insurance — provided primarily through the National Flood Insurance Program (NFIP) — many homeowners face significant uninsured exposure they may not even recognize. Moody's points to Hurricane Helene in September 2024, where rainfall near Asheville, North Carolina exceeded a 1-in-1,000-year return period and the flood protection gap in Buncombe County reached approximately 88%. Although private flood policies have roughly doubled since 2020, they still represent only about 10% of total policies in force, and NFIP policy counts have declined by a comparable amount, leaving the national protection gap largely unchanged. Moody's projects that uninsured exposure could rise about 25% by 2050, to around $472 billion, if take-up and resilience investment remain static.