An assessment by Moody’s Ratings, authored by Jennifer Chang, Senior Vice-President for Sustainable Finance Credit, and Firas Saleh, Director of North American Flood Models, evaluates residential flood exposure across the United States and finds substantial gaps between insured and uninsured losses at county level under different flooding scenarios.
Moody’s Ratings indicates that flood exposure is becoming an increasing credit concern for US state and local governments, driven by more frequent and severe weather events, ongoing development in exposed areas, and relatively low levels of insurance coverage.
Using the Moody’s RMS US Inland Flood HD model, Moody’s Ratings assesses potential uninsured losses under a 1-in-100-year flood scenario, a more severe 1-in-500-year event, and a 1-in-100-year flood scenario under an intermediate-emissions pathway by 2050.
The analysis assumes insurance coverage and flood defences remain unchanged, meaning the results reflect existing structural exposure rather than projected realised losses.
It compares the replacement value of residential properties exposed to flooding with those covered by the National Flood Insurance Program, covering river, surface water and coastal flooding, and identifying where uninsured exposure is most concentrated.
Moody’s finds a persistent mismatch between expanding flood risk and insurance protection. Under a 1-in-100-year event, potential uninsured residential losses are estimated at around $375 billion, with an overall protection gap of 65%.
Although most US counties show some exposure, the majority face relatively modest potential uninsured losses of $150 million or less, while higher concentrations above $5 billion are mainly located in Florida, Louisiana, South Carolina and Texas. Roughly 90% of counties are exposed to flood risk to some degree, but the scale of losses varies significantly.
In a 1-in-500-year scenario, Moody’s estimates uninsured losses could rise to more than $1 trillion, with the protection gap exceeding 70% and high-loss counties extending across 11 additional states beyond traditional coastal hotspots. Under the intermediate-emissions scenario by 2050, uninsured losses increase by about 25% to approximately $472 billion, with the geographic spread of high exposure widening further, including into New Jersey.
Moody’s also highlights that severe rainfall events in recent years demonstrate how realised flooding can exceed historical expectations, creating uninsured losses even in areas not typically associated with high flood risk.
While protection gap percentages signal vulnerability, the report stresses that the fiscal impact ultimately depends on the absolute scale of losses and the capacity of counties and states to absorb shocks through federal support, reserves, insurance payouts and governance frameworks.
Overall, Moody’s Ratings concludes that flood risk is broadly distributed across the US but unevenly insured, leaving many local governments exposed to material potential uninsured losses that could increase fiscal strain unless addressed through higher insurance uptake or stronger resilience investment.
