Tsunamis And The National Flood Insurance Program

On July 30, an 8.8 magnitude earthquake occurred off of Russia's Eastern Kamchatka coast, subsequently triggering tsunami warnings in, among other places, Japan and Hawaii. Some have postulated that rising sea levels could increase tsunami hazards and attendant property damage in the future.¹ In Japan, tsunamis arising from earthquakes are primarily covered under a public-private earthquake coverage arrangement whereby optional coverage is provided by private insurers and then ceded, and retroceded under an excess-of-loss structure, to government-run reinsurers and the Japanese government.

In Hawaii, and the United States generally, there is no dedicated tsunami insurance program, and commercial insurers issuing residential property insurance generally exclude damage caused by tsunamis through rising and driven waters exclusions (or similar). Tsunamis are instead primarily covered as flood insurance under the National Flood Insurance Program (NFIP), which is