Homeowners Insurance
From Hurricane Katrina to California’s Camp Fire, How Natural Disasters Affect Population — And How You Can Prepare Financially
Natural disasters can have a devastating impact on an area's population. After the 2018 Camp Fire — the deadliest wildfire in recent U.S. history — the number of people living in Paradise, Calif., dropped by 83.2%. In some cases, the decrease in population is permanent. Hurricane Katrina struck New Orleans 15 years ago, and the city has yet to regain its population.
However, not all towns or cities experience a drastic population decline. So ValuePenguin researchers studied population trends in the years preceding and following some of the biggest U.S. natural disasters in the 21st century to see which areas fared better — and why. We also looked at what preemptive steps consumers can take to prepare financially for natural disasters.
Key findings
- After the 2018 Camp Fire that killed more than 80 people, the population of Paradise, Calif., fell by 83.2%. Some residents that were forced to move settled in nearby Chico, which saw its population rise by 9.5% the following year.
- After Hurricane Katrina in 2005 — the most expensive natural disaster in U.S history — the population of New Orleans fell by 53.4%. In 2005, the city had a population of 494,294. In 2006, that figure plummeted to 230,172. By 2019, the New Orleans population — 391,493 — was only at 79.2% of 2005 levels.
- Not all large natural disasters lead to population migrations. In Houston, the population after Hurricane Harvey in 2017 grew by 0.1%. However, that is a third of the growth rate from 2016 to 2017, which suggests some effect.
- In some cases, populations continue rising — even after natural disasters. A year after the 2013 Colorado floods, the population in Boulder, Colo., rose 1.7%, roughly in line with the population change in previous and subsequent years.
Biggest population declines seen after wildfires, hurricanes
The deadly 2018 Camp Fire is the most destructive wildfire in California history. In addition to physical damage and lives lost, the fire decimated the population of Paradise, Calif. The number of people living in the town went from 26,711 in 2018 to 4,476 in 2019 — an 83.2% decline. This drop represents the most significant population decrease among the natural disasters we studied. Here’s a look at the other largest declines:
Event | Location | Population, year of event | Population, year after event | Population decline |
|---|---|---|---|---|
| Hurricane Katrina (2005) | New Orleans | 494,294 | 230,172 | 53.4% |
| Hurricane Harvey (2017) | Rockport, Texas | 11,145 | 10,513 | 5.7% |
| Great Smoky Mountains wildfires (2016) | Gatlinburg Tenn. | 4,172 | 3,944 | 5.5% |
Source: US
Our research shows that areas with a declining population before a natural disaster may see an accelerated decrease following the event. For instance, Key West, Fla., experienced 0.2% and 0.8% drops in population in the two years before Hurricane Irma struck the island city in 2017. In the two years after the storm, the population decreased by 2.1% and 1.6%.
Notably, the four areas with the largest population declines were all experiencing growth before the disaster hit.
Camp Fire
The 2018 Camp Fire that struck Butte County, Calif., was responsible for more than 80 deaths, the majority of which were Paradise, Calif., residents. The fire destroyed 18,800 structures, including nearly 14,000 residences. And about 30,000 people lost their homes. The fire was responsible for an estimated $15 billion in damage, the most expensive wildfire on record.
The significant population decline (83.2%) may have a connection to the town’s demographic. Paradise, considered an enclave for older adults (65 and older) at the time of the fire, saw a significant departure of that age group. Of those 65 and older that relocated, 54% moved more than 30 miles. It appears older residents chose to resettle elsewhere — perhaps with family — rather than to try to rebuild their lives in Paradise or surrounding areas. Some Paradise residents landed on their feet in nearby Chico, Calif., which saw a 9.5% increase in population in 2019.
Hurricane Katrina
Hurricane Katrina is one of the most devastating and expensive natural disasters in U.S. history. The storm wreaked havoc on multiple states and was responsible for more than 1,800 deaths and $170 billion in inflation-adjusted damages. Of the areas impacted by Hurricane Katrina, none was affected more than New Orleans. The storm flooded at least 80% of the city, displacing 53.4% of the population.
Our research shows that New Orleans has yet to recover. Beginning in 2007 — two years after the storm — the city’s population began to increase. It did so annually until 2011, when it dipped by 1.2%. From 2012 to 2018, the population increased again only to drop slightly in 2019. Despite much growth since 2005 and continued efforts to rebuild the city, New Orleans’ population remains at 79.2% of its 2005 level.
Economic disparity plays a role in the city’s slower recovery. Some of the hardest-hit areas in New Orleans were low-income neighborhoods, such as the Lower Ninth Ward. Many residents of these areas didn’t receive sufficient funding and recovery resources.
Hurricane Harvey
In 2017, Hurricane Harvey struck Texas, making landfall near Rockport before battering surrounding areas. It was the first Category 4 hurricane to hit the Texas coast in more than 50 years. The storm dumped a record-breaking amount of rain along its path, causing massive flooding and destroying more than 200,000 structures. Hurricane Harvey killed nearly 70 people and did more than $131 billion in damage, making it the second-most costly natural disaster in the U.S. after Hurricane Katrina.
Hurricane Harvey displaced more than 30,000 people. Of the multiple areas the storm hit, Rockport felt the most significant impact. The beach city’s population went from 11,145 before the storm to 10,513 the following year — a 5.7% drop. While Rockport and other coastal areas saw a decline, Houston, which Harvey also hit, fared better. The city — one of the country’s largest metro areas — saw a slight increase of 0.1%.
Great Smoky Mountains wildfires
The Great Smoky Mountains wildfires in Tennessee destroyed nearly 2,500 structures and caused 14 deaths in the fall of 2016. The fires were part of a series of wildfires that burned more than 5 million acres across the Southeast and West, leaving $2.6 billion of damage in its wake.
Gatlinburg, Tenn. known as the Gateway to the Great Smoky Mountains, was hit hard. The city lost 5.5% of its residents, going from 4,172 to 3,944. Gatlinburg is the smallest of the places we researched, and — notably — its population continued to drop years after the fires. The ongoing decline could be due to a drop in tourism to the popular destination after the fires.
Populations remain static after Superstorm Sandy, 2011 flooding, tornadoes
Many areas that didn’t see a drastic decrease in population after a natural disaster saw little to no change in the years following. In addition to Houston, which saw 0.1% growth following Hurricane Harvey, several towns and cities in our study had minimal fluctuations.
Atlantic City grew by 0.2% the year after Superstorm Sandy struck the Northeast in 2012. Similarly, Memphis, Tenn. remained flat, seeing only a 0.5% population increase following the 2011 Mississippi River floods. The two areas impacted by tornadoes in our study — Moore, Okla., and Joplin, Mo. — both had slight increases a year later, 1.1% and 0.3%, respectively.
Paradise residents turn to Chico, Calif. after Camp Fire
Some cities and towns see a notable increase in population after a natural disaster. Like Chico, Calif., some of these places become a mecca for displaced residents in nearby areas. In other cases, like Boulder, Colo., the growth follows population trends before the disaster struck.
Event | Location | Population, year of event | Population, year after event | Population increase |
|---|---|---|---|---|
| Camp Fire (2018) | Chico, Calif. | 94,342 | 103,301 | 9.5% |
| Colorado floods (2013) | Boulder, Colo. | 102,719 | 104,451 | 1.7% |
| Hurricane Irma (2017) | Miami | 456,617 | 462,819 | 1.4% |
Source: U.S. Census Bureau
How to prepare financially for a natural disaster
While no one can predict Mother Nature, consumers can take some preemptive measures to prepare for the unknown. ValuePenguin insurance analyst Andrew Hurst provided steps for renters and homeowners to protect themselves financially before the next natural disaster strikes.
- Know the risks unique to your area. As climate change affects the frequency and nature of disasters, consumers should know what type of damage is likely to affect their homes. "By doing this sort of research, one may discover that in the past decade, the number of floods impacting their area has increased," Hurst said. "Or, alternatively, that seasonal windstorms have caused recurring damage." Armed with this information, you’ll know if you need to supplement your standard home policy with additional types of insurance or if you need to increase your coverage limits.
- Establish or increase your emergency fund. In times of disaster, having a cash reserve is vital. Consumers should look to pad their emergency fund to cover food, gas, shelter and other necessities during a disaster.
- Have an evacuation plan. Should you need to vacate your home when facing an emergency, knowing where you will go and how you will get there ahead of time will provide some calm in what is likely to be a stressful situation. Consider your shelter options beforehand, and communicate your plans with friends and family members.
- Keep an emergency kit on hand. In addition to having cash on hand, the Federal Emergency Management Agency (FEMA) recommends building an emergency kit with basic supplies, including a flashlight, batteries, whistle and first-aid kit. "People should also keep provisions like water and food according to the size of their families," Hurst advised.
Getting the most from your insurance after a natural disaster
Unless you reside in an area with a high risk of fire, floods or other danger, you probably don't need additional insurance. In any case, all consumers should make sure they have the right protections in place in the event disaster strikes.
Understand your coverage options
Most insurance policies offer three levels of protection for renters or homeowners: actual cash value, replacement cost value and guaranteed (or extended) replacement cost value.
Actual cash value policies factor in a home's depreciation. "That means the coverage for one's property decreases over time," Hurst said. Instead, consumers should opt for replacement cost value (which is the most common) or guaranteed replacement cost value. "These policies rebuild or restore damaged property so that they'd exist in their former state in today's market," he said.
Conduct an inventory of your belongings
All homeowners and renters — regardless of where they live — should conduct an item-by-item home inventory. Having this gives you and your insurer exact details of your belongings and their value, which will help during the claim process.
"Ideally, a person should track everything they own, including what it cost, its functions, its model and serial number and any other unique information," Hurst advised. "Insurers are obligated to replace one's things as close to the damaged or destroyed property as possible. But there's financial incentive for insurers to replace property with cheaper models if they can."
Know what supplemental coverage you need
Again, standard homeowners insurance covers most types of damage caused by natural disasters. However, some scenarios warrant additional insurance. And in some cases, your mortgage lender will require you to carry additional insurance.
Damage | Covered by standard policy? | Additional insurance needed? |
|---|---|---|
| Flood damage and mudflows | No | Flood insurance |
| Hurricane damage | Yes (except for flood damage; in vulnerable areas, insurers may charge a separate deductible for wind damage) | Flood insurance (if you live in a high-risk area) |
| Tornado damage | Yes (in vulnerable areas, insurers may charge a separate deductible for wind damage) | N/A |
| Hail damage | Yes (in high-risk areas, insurers may charge a higher deductible or limit payments if damage is purely cosmetic) | N/A |
| Fire damage | Yes (except in some high-risk areas or if an insurer has ceased coverage) | Dwelling fire policy or a FAIR Plan |
| Earthquake, sinkholes and mudslides | No | Specialized earthquake, sinkhole or mudslide insurance |
| Volcanoes | Yes (except volcanic effusion and damage caused over time by volcanic dust) | Flood insurance (to cover volcanic effusion) |
Methodology
ValuePenguin researchers gathered a list of natural disasters in the 21st century and compared the population change in cities affected by the natural disasters. The natural disasters and the cities or towns we examined were:
- 2005’s Hurricane Katrina (New Orleans)
- 2011’s Mississippi River floods (Dyersburg and Memphis, Tenn.)
- 2011’s Joplin tornado (Joplin, Mo.)
- 2012’s Superstorm Sandy (New York and Atlantic City and Brigantine, N.J.)
- 2013’s Moore tornado (Moore, Okla.)
- 2013’s Colorado floods (Boulder, Colo.)
- 2016’s Great Smoky Mountains wildfires (Gatlinburg, Tenn.)
- 2017’s Hurricane Harvey (Beaumont, Houston, Port Arthur and Rockport, Texas)
- 2017’s Hurricane Irma (Fort Pierce, Key West, Miami and Miami Beach, Fla.)
- 2018’s Camp Fire (Chico and Paradise, Calif.)
Population data comes from the U.S. Census Bureau.