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 managed by the Federal Emergency Management Agency (FEMA). However, to qualify for coverage, the damage must be the result of a “flood.” One relevant definition of “flood” is found at 44 C.F.R. § 59.1, which is the Definitions subsection of the General Provisions Part of the NFIP Regulations and states as follows:

Flood or Flooding means:

• A general and temporary condition of partial or complete inundation of normally dry land areas from:
  • The overflow of inland or tidal waters.
  • The unusual and rapid accumulation or runoff of surface waters from any source.
  • Mudslides (i.e., mudflows) which are proximately caused by flooding as defined in paragraph (a)(2) of this definition and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current.
• The collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels or suddenly caused by an unusually high water level in a natural body of water, accompanied by a severe storm, or by an unanticipated force of nature, such as flash flood or an abnormal tidal surge, or by some similarly unusual and unforeseeable event which results in flooding as defined in paragraph (a)(1) of this definition.

A more specifically applicable definition of “flood” is found in Appendices A(1) through (A)(3) to Part 61 (Insurance Coverage and Rates) of the NFIP Regulations, which contain the Standard Flood Insurance Policy (SFIP) Dwelling, General Property, and Residential Condominium Building Association Forms. Section II.B of each of the SFIP forms contains the below definition of “flood,” which, although it excludes the “abnormal tidal surge” language found in the general regulatory definitions excerpted above, still covers floods caused by tsunamis.

• Flood, as used in this flood insurance policy, means:
  • A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (one of which is your property) from:
    • Overflow of inland or tidal waters;
    • Unusual and rapid accumulation or runoff of surface waters from any source;
    • Mudflow.
  • Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined in B.1.a above.

Tsunamis were specifically addressed in a June 2023 FEMA Fact Sheet titled “Understanding Tsunamis and the NFIP,”[2] which reiterated and clarified that “NFIP flood insurance policies typically cover flood damage caused by a tsunami.” The Tsunami Fact Sheet included a definition of “flood” nearly identical to that found in the SFIP quoted above, except for the differences shown below (in strikethrough and underlined type, as applicable).

• A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (one of which is your property) from:
  • Overflow of inland or tidal waters;
  • Unusual and rapid accumulation or runoff of surface waters from any source;
  • Mudflow.
• Collapse or subsidence of land along the shore of a lake or a similar body of water due to erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood from the overflow of inland or tidal waters, as defined above.

Though “as a result of” and “due to” could arguably be interpreted differently depending on the facts, it is unlikely that the slight definitional variations shown above were intended to convey any substantive difference in coverage for floods caused by tsunamis, and, more likely, the language was used in an attempt to increase readability of the Tsunami Fact Sheet. Regardless, both definitional phrasings would encompass floods caused by tsunamis. As FEMA also states in the Tsunami Fact Sheet:

Since tsunamis push water inland when they reach a coast (also known as tsunami inundation), the damage they cause is covered by flood insurance. Damage caused by debris floating in floodwaters – also known as debris flow – is also covered as long as floodwaters are carrying the debris flow. Debris being carried by a landslide caused by a tsunami is not covered.

Per an April 2021 FEMA presentation on FEMA’s role in tsunami mitigation,[3] as part of the NFIP, FEMA “has included tsunami wave heights on [Flood Insurance Rate Maps; FIRMs] since the 1970’s for areas of the west Coast, Hawaii, and other Pacific Islands where tsunami is the primary flood hazard,” and “FEMA has modernized its FIRM’s through its Risk Map Program”, which “is intended to include other hazards including tsunami.” However, as FEMA notes, “Tsunami wave heights normalized to a one percent annual chance event may not show the true potential threat since the maximum tsunami inundation could be much greater than at a one percent annual probability limitation,” and, “Except for areas like Hawaii where tsunami is the primary hazard, NFIP has elected to not provide tsunami inundation zones on recent FIRM’s”, but that “our new digital FIRM’s will allow a community to overlay their own tsunami inundation maps independent of recurrence frequency if they wish.”

In these comments, FEMA seems to be indicating that, though tsunami risk may be adequately priced, given that major catastrophic tsunamis may have less than a 1% annual probability, there could be a mismatch between legal and regulatory requirements driven by FIRMs and the actual hazard posed by catastrophic tsunamis. Extrapolating for the potential increased hazard that may arise in the case of rising sea levels, FEMA’s implied concerns could be further exacerbated in the coming decades. Based on a 2012 guide published by Japan’s National Institute for Land and Infrastructure Management,[4] it appears that one way in which the Japanese structure avoids this mismatch is by categorizing zones based on prefectural governors’ determination of “the potential tsunami inundation; namely, the area and depth of inundation that is expected to result from a tsunami” as opposed to basing the determination on probability.[5] In conclusion, flooding caused by tsunamis should be covered under the NFIP’s SFIP, but there appears to be continued discussion around whether the regulatory structures for identifying and categorizing tsunami hazards are adequate to account for potentially increased threats arising from the effects of rising sea levels.

[1] See, e.g., https://www.mdpi.com/2077-1312/11/5/945; https://www.science.org/doi/10.1126/sciadv.aat1180

[2] Understanding Tsunamis and the NFIP Fact Sheet, available at https://agents.floodsmart.gov/sites/default/files/fema-understanding-tsunamis-and-nfip-fact-sheet-06-2023.pdf

[3] Available at https://nehrp.gov/pdf/3-NTHMP-FEMA%20role_ACEHR_April2021.pdf

[4] Available at https://www.nilim.go.jp/english/disaster/tsunami.pdf

[5] Id. at 4.