The remnants of Tropical Storm Rachel have left a trail of coastal and flash flood damage from Southern California to southern Nevada, much of it from perils that standard property policies generally exclude. For brokers in the region, the first question on many claims will be which policy, if any, responds.
Rachel made landfall over northern Baja California on Saturday before its remnants moved inland across the Southwest. The National Hurricane Center issued its final advisory on Sunday, after which the system was no longer classed as a tropical storm. No industry insured loss estimate had been published as of Monday.
The most severe property damage was along the coast, and it came from surf and tides rather than rain. In Long Beach, large waves damaged a coastal bulkhead on the peninsula, sending water into homes and streets. As of Monday, city officials said building inspectors had red-tagged eight buildings containing 13 homes as unsafe. They put the cost of repairing public infrastructure at $1.5 million to $3.5 million, to be paid from the city’s tidelands emergency reserves. Waves also tore apart a historic boardwalk, and oceanfront residents were evacuated. Local reports described waves washing sand from beneath foundations, with inspectors working in the windows between high tides.
In Newport Beach, coastal flooding began late Thursday on the Balboa Peninsula, and the city declared a local emergency on Friday and closed its piers. Oceanfront homes in both cities were partly submerged as heavy surf broke through sand berms built to hold back the water.
Inland, the storm’s remnants brought record rainfall to Las Vegas on Sunday. The city recorded 1.08 inches by 7 a.m., beating the daily record of 0.78 inches and exceeding the total for its entire monsoon season. Floodwaters reached areas near the Strip, stranded vehicles and led to swift water rescues on the 215 beltway. Flood watches remained in place across parts of the Southwest on Monday as a separate weather system brought more rain.
Standard homeowners and commercial property policies generally cover wind and storm damage but exclude flood. The California Department of Insurance has noted that these policies typically exclude flood, mudslide and debris flow unless they are directly or indirectly caused by a recent wildfire or another covered peril.
Wave damage to Long Beach homes and floodwater in Las Vegas properties will therefore mostly fall under flood insurance, through the National Flood Insurance Program or a private flood carrier, rather than under homeowners policies. Take-up of flood cover in both Southern California and the Las Vegas area has historically been low, especially outside mapped high-risk flood zones, so many affected owners may have no cover for the water damage at all.
Where waves have removed the sand beneath foundations, claims handlers may also ask whether erosion or earth-movement exclusions apply alongside the flood exclusion, and brokers who raise the question with carriers early will be better placed for the conversations that follow. Where damage combines wind and water, or where the line between wave action and covered wind damage is disputed, careful documentation of each will matter.
Vehicles are the main exception. Cars damaged by floodwater are generally covered if the owner has comprehensive auto coverage, which is likely to make auto one of the larger insured lines from this event.
Commercial clients near the Las Vegas Strip should check whether their policies include flood sublimits, and whether business interruption cover responds to flood-related closures or loss of access. Forecasters have described the storm as a preview of what could come if California sees a strong El Niño winter, a pattern associated with heavy storms and coastal erosion. That gives brokers a natural opening to raise private flood and NFIP cover with clients outside mapped flood zones, and to explain flood risk beyond the hurricane-prone coasts, before winter storms arrive.
