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​Photo by NASA Goddard Photo and Video. Used under a Creative Commons Attribution 2.0 license.

“Hurricane Sandy revealed just how real storm surge risk is,” commented Dr. Claire Souch, vice president, model solutions at RMS. “Our model shows there is a 20 percent chance that storm surge loss will be greater than wind loss for any U.S hurricane that makes landfall, which rises to almost 40 percent along the northeast coast of the United States — this is a risk the market can no longer afford to ignore.”

via www.rms.com

This warning from RMS should be read and absorbed by everyone in the property-casualty insurance industry. It should also be sobering news for anyone who owns property in coastal areas. In the debate over what damaged a property, wind or water, it appears that water is more likely to be the culprit.

Note Dr. Souch's statement about the northeast U.S. - almost a 40 percent chance that storm surge will cause greater losses than the wind. Parts of New York City, Long Island, and New Jersey are just getting back on their feet after Sandy. And there's a very real possibility that they'll go through it all over again in the near future.

Today is August 8. Tropical Storm Irene hit on August 28, 2011. Clearly, something like this can happen at any time. A flood insurance policy from the National Flood Insurance Program has a 30-day waiting period before coverage applies. Anyone near the coast who has been undecided about whether to buy a flood policy might want to take the leap now.

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