The Congressional Budget Office warned in a new report that the cost inflicted by hurricanes and storm-related flooding is expected to hit $54 billion a year, equivalent to 0.3 percent of the nation’s current gross domestic product.
That total consists of $34 billion in expected annual economic losses to the residential sector, $9 billion to commercial businesses, and $12 billion to the public sector.
CBO estimates that a combination of private insurance coverage for wind damage, federal flood insurance, and federal disaster assistance would cover roughly 50 percent of losses to the residential sector and 40 percent of losses to the commercial sector.
Under current conditions and policies, the expected annual cost to the federal government — and thus to taxpayers — of damage from hurricane winds and storm-related flooding is $17 billion for the major categories of spending that CBO analyzed.
CBO found that approaches that would reduce expected storm losses and their effects on the federal budget include limiting greenhouse gas emissions, increasing federal funding to assess flood risks or to lessen damage if storms occur, expanding purchase requirements for flood insurance, and increasing the share of disaster assistance paid for by state and local governments. Without policy changes, storm-related costs are likely to rise in the future because of climate change and increases in development in risky areas.