A new report, prompted by last year's experience with Hurricane Irene, quantifies in detail the value of U.S. homes at risk of damage from storm surge.
Local counties figure prominently in the nation's total of 4 million properties with structures worth $710 billion at risk from Category 2 to 5 hurricanes.
The report by CoreLogic, an analytics and business services firm, ranked U.S. metropolitan areas for properties at risk to the largest hurricanes.
Cape May County was 12th in the nation for total value of structures at risk, with 49,034 properties with a combined estimated value of $16 billion. Ocean City alone has 7,677 such properties valued at $3.1 billion.
Atlantic County was 22nd among metro areas with 34,183 properties, with $7.9 billion in structures at risk. Since the report considered single-family homes and not businesses such as casinos, the municipalities with the highest total structure values were Margate and Brigantine.
Even though its shore is a bay and not the ocean, Cumberland County also ranked high among metro areas - 45th - with 4,050 properties and $767 million in structures at risk.
Long Beach Island isn't part of a defined U.S. metropolitan area, but its value contributed to New Jersey ranking fourth among states in number properties at risk with 346,035, and third for value of structures at risk with $96 billion.
Florida had the highest value of buildings at risk with $188 billion, followed by New York with $111 billion. Virginia followed New Jersey with $49 billion, while perennial hurricane target Louisiana was fifth with $41 billion.
Howard Botts, director of database development for CoreLogic, said Hurricane Irene's trip up the Atlantic Coast last year convinced the firm to look at storm-surge risk in a new way, beyond the Gulf states most frequently affected by tropical storms.
The report's values for residential properties in April and May provide a fresh look at housing development in coastal areas.
The teardown and replacement of older houses with newer and bigger structures has boosted the value of barrier island real estate, said Thomas Heist IV, president of the Thomas H. Heist Insurance Agency, which has offices in Ocean City, Margate, Egg Harbor Township and Upper Township.
In part, that has reduced the risk of storm damage.
"New structures are normally higher off the ground, so they're less susceptible to flood damage," Heist said. "They have new electric and plumbing services, so there is less likely to be insurance loss from fire and leaks."
From the insurance industry's view, though, such advantages pale in comparison to the greater structure value at risk.
"There's more property value in the aggregate and it's scaring the heck out of the insurance industry. If all the homes still blow to the ground, they're looking at numbers that could cripple the industry," Heist said.
Patrick Breslin, spokesman for New Jersey Manufacturers Insurance Co., said homeowners policies can keep up with property values, but an increase in damaging weather is another matter.
"Weather risk has been increasing the last five years, especially in the last 18 months or so," Breslin said. "During 2011, besides Tropical Storm Irene, we had an enormous snowstorm in October and in the preceding winter three severe storms, one with high winds."
Although Irene weakened from hurricane status by the time it reached New Jersey and did most of its damage inland instead of along the coast, the storm turned out to be the costliest in New Jersey Manufacturers' history with total claims of $75 million, he said.
Even that wasn't enough to trigger the company's own re-insurance against a wave of claims from a catastrophic storm, Breslin said. The company sets its re-insurance threshold high to keep its costs down.
But the CoreLogic report shows the potential for damage from a catastrophic storm, and re-insurers are raising their rates in response to their increased risk, Heist said.
Combine that increase with insurers raising their rates in response to the costs of past storms and the result is homeowners insurance premiums 5 percent to 10 percent higher this year on average, he said.
And that's just ordinary property-damage coverage. Flood insurance is a separate and also increasingly costly requirement for structures at risk to storm surge.
Heist said Congress wants the price of federal flood insurance to reflect its cost - "they don't want to subsidize people who live at the coast" - and failure to agree on how quickly to end flood insurance subsidies has resulted in temporary extensions of the program instead of full re-authorization.
"Over the next four years, I think we're going to see the flood insurance program increase in price by about 25 percent," he said.
Heist said there is a proposal in Ocean City to require new construction to be a foot higher off the ground than current regulations, and raise the maximum height of buildings by a foot at the same time. That would reduce the risk of flood damage somewhat and presumably the cost of insurance.
"Proponents are selling it as a way to save money, but the reality is it would mitigate pricing increases coming our way," he said. "I'm not sure people will save money, but they may not have as high an increase."
Contact Kevin Post:
Local storm-surge risk
The number of residential properties potentially affected by a Category 4 hurricane in selected towns, and the estimated value (as of May 15) of structures at risk in those towns.
Cape May County
Ocean City 7,677 $3.1B
Avalon 4,146 $2.8B
Cape May 9,335 $2.7B
Wildwood 8,316 $2.0B
Middle Township 5,195 $1.5B
Stone Harbor 2,308 $1.2B
Villas 6,141 $931M
Sea Isle City 1,202 $378M
Margate 4,735 $1.5B
Brigantine 5,174 $1.2B
Ventnor 4,303 $965M
Atlantic City 5,737 $844M
Longport 1,557 $653M
Linwood 1,557 $528M
Northfield 1,541 $495M
Somers Point 2,474 $328M
Millville 1,117 $197M
Port Norris 805 $153M
Bridgeton 523 $94M
Newport 444 $86M
Source: 2012 CoreLogic Solutions Storm Surge Report