In Part 2 of this episode, host Maiclaire Bolton-Smith continues the conversation with Kent David, a senior leader in analytics consulting, and Tom Larsen, an expert in catastrophe risk management and insurance solutions, to talk about the atmospheric rivers, bomb cyclones and snow that have made headlines and again put California’s natural hazard risks in the spotlight.

Get insights into the state’s wildfire risk, the consequences on reservoir capacity and the future impacts of the current snowpack while also learning a few choice colloquialisms from our guests.

Find full episodes with all our guests in our podcast archive here: https://clgx.co/3zqhBZt

In This Episode:

2:02 – It snowed in California – a lot. But what happens when that snow melts?

5:55 – How much reservoir capacity is available in California to absorb the snowpack?

8:15 – Meteorologists modeled a dry winter. What happened?

10:37 – Do these winter storms change California’s wildfire risk?

12:44 – Katy, bar the door! Climate change will change flood insurance.

19:39 – Visit us in New Orleans, Louisiana!

20:15 – Mitigation is only the first step to becoming resilient.

Kent David:

The additional rain will eventually result in growth that could fuel future fires. It could also result in trees being healthier and being more resistant to pine bark beetles. So it's really hard to say.

Katia Oloy:

Welcome back to part two of our mini-series on what actually happened during the California floods this winter. If you missed Part 1, I do recommend going back and catching up on last week's episode. To recap, we introduced our guests, Tom Larsen and Kent David, to talk about the weather patterns that caused this unusual series of rain events and why flooding is such a hyperlocal phenomenon. This week, we're going to find out what these storms might mean for California's wildfire season and future climatic patterns. And don't forget, we always welcome our listeners to reach out to us on social media where you can find us using the handle, @CoreLogic, on Facebook and LinkedIn or @CoreLogicInc, on Twitter and Instagram.

Tom Larsen:

But it certainly was of concern. I think certainly, we're off the hook as there's a lot of precipitation that's trapped in the mountains in snow right now. So that was a savior.

Maiclaire Bolton Smith:

Yeah, that's interesting. I'm glad you brought that up, Tom because that's kind of a looming thing that we haven't really talked about too, is the level of snowpack. And when that melts, is that going to cause extra flooding too? I mean, I think that's something that should be on the radar. Are we concerned with that?

TL:

MBS:

Okay. One other thing that has been kind of crazy with all of these storms that— the one at the beginning of March — was the amount of snow that we got in California. This is crazy. I remember the year I moved to California, it was this big deal about how well we were finally going to get snow and there was snow at something like 10,000 feet. I had friends building snowmen in their backyards in the Bay Area. There was snow at 250 feet elevation. I know we were driving down the street, you could see snow from our house. Tom, I know you could see snow in your backyard. Can we talk a little bit about what happened to bring all of this snow to the Bay Area?

TL:

Maiclaire, the snowfall was incredible. Here in the San Francisco Bay Area, you see snow every 10 years or so and it gets written up and it's quite exciting. But what was unusual this year was the breadth, the geographic breadth of the snow. We saw snow down in San Bernardino mountains in Los Angeles. We saw tremendous flow in the California Foothills and we saw a lot here. And it's not just the geographic breadth, but it was how deep. It was really fun to see.

MBS:

Yeah, like gabillions of feet of snow in Tahoe. It was so crazy. And seeing these pictures of Los Angeles with the palm trees in the forefront and then the snow on the mountains in the background, it was just incredible.

TL:

Yeah. And we get it because for us, it's novel and it was a mild inconvenience for us here in the Bay Area. Certainly, those who crashed their cars, it's more than mild. But for society, for the clients that we support, where the most severity were in the areas where they'd normally get these small accumulations of snow and they had massive... and when I say small, it was okay, a big storm, three storms a year, they have a foot or two of snow. And then all of a sudden one storm, they got eight feet of snow.

MBS:

Wow.

TL:

And it led to widespread confusion. These are areas that weren't geared up to really manage that level of snow and remember that it happened simultaneously to everywhere got it. So the resources, we ran low on the resources to be able to support that — the snow plows and response that people need.

MBS:

Yeah, we're not ready to support that here in California. We don't have the infrastructure in place to support it.

TL:

It is a challenge. And you think about it, we spent a lot of time thinking about what is our climate change future. And we have to remember that one of the key precepts of climate change is that what we've done in the past is not necessarily a good planning scenario for what's in the future. And while the book is not written on what are the climate change effects upon this recent event, how much was the attribution of climate change into this event? What we do have to wonder is do we have to staff up sort of like how many fire departments do we need. Do we need to have a whole bunch of snowplows even though around, ready for these massive snowfalls, even though we know that in the big picture, there'll be less snow.

MBS:

We're not going to get that very much. Yeah.

TL:

Southern Central Valley, that is a major concern to me because the snowfall, the amount of snow water equivalent in the hills there is two to three times the average. It's still snow. But it is what happens to snow? It melts. Used to be called, the Tulare Lake was the biggest lake in the U.S., surface area bigger than the Great Salt Lake. It's all farmland now.

MBS:

Wow.

TL:

So it's a lake bottom and it's dry. But it probably won't be this year. It has, in the last 25 years, they have to pump it out. They have to pump it out so it can get to a river and go to the ocean.

MBS:

Interesting.

TL:

It's what they did last time. And so the big question is what are we going to do with all that water when it comes? It exceeds the amount of available reservoir capacity. We know it's coming at us in the next three or four months. So that's the one that should give us some alarm. There are numerous communities that are at risk. There's a big part of the farming, very productive farming area in California.

And simultaneously, we've got the depletion of the underground water aquifer that emotionally you want us to put that water back into the ground and not have it go to the ocean. But it takes time and you have to take farming land out of production to do that. So it is a risk.

Combating that, we have, most of those reservoirs, many of them are flood control. And any flood control reservoir, they're not full now. They're purposely releasing water to maintain a reserve so that they can capture. And we could go through along the coast of where the flood control reservoirs are to moderate the flows. So it is a risk, but it's not one that's taken idly. It's certainly actively monitored.

MBS:

Okay.

KD:

And the flip side, to further that kind of beneficial impacts, given that this was tremendously impactful in a negative way, on the flip side of that, we've been in this long enduring mega-drought in the West. And the North Bay, Marin in particular, is not connected to the Sierras in terms of access to water. They rely solely on local reservoirs. And as a result of this storm, they've essentially filled all of their reservoirs and are now in a position where this next summer, this next dry period, will probably be one that's much less stressful and more survivable than where they were just two months ago or three months ago.

And as Tom said, the snowpack building up — the reservoirs writ large in the state are not all filled up, but we're in a much better position to address this drought issue now than we were before the onslaught of these storms.

MBS:

Yeah. I'm glad you mentioned this drought too, because I think when we look back at what the meteorologists, if we look at our National Weather Service at NOAA, the National Oceanic and Atmospheric Administration, they were predicting a dry winter this year. I don't think anybody really anticipated it being as wet as it's been. So what happened?

KD:

So a good friend and colleague of mine likes to say that all models are wrong, but some models are useful.

MBS:

Is that colleague Tom Larsen?

KD:

Indeed that is. And in this case, when you're talking about climatological models and long-range weather models, what they were saying was it looks to be due to the fluctuations and sea surface temperatures in the West, in the Pacific Ocean, that there was a decent chance or a good chance that we would have a dry winter. And where it's wet and dry is kind of a north-south line of demarcation. California's Bay Area, the middle of the coast, is usually that point of inflection. So wet or dry, can go north or south from there.

But that's all talking about the climatological expectations. Within any of those expectations, there's a wide range of potential outcomes. And so even though we were expecting it to be, we the meteorologists, were expecting it to be a dry winter for much of California, it's not totally unexpected that you'd have a wet winter.

MBS:

Sure.

KD:

It's not the most likely outcome, but it's certainly a possible outcome.

KO:

The National Oceanic and Atmospheric Administration did indeed forecast California to have a drier-than-normal winter season. However, that didn't turn out to be the case. According to the Golden Gate Weather Services, which analyzed data for the National Weather Service, there are 13 counties that had more than 100% of the rain expected in a "normal season." Another 12 had over 90% of normal total rainfalls. If we do the math, that means 44% of all of California counties received at least 90% of normal rainfall totals. That's a big deal in a state that's been drought-stricken for years.

Maiclaire Bolton Smith

So we've talked a lot about wildfire and wildfire risk. And a lot of the wildfire is because we've had this prolonged drought in California, and now we've had this prolonged rainfall. Does it change the wildfire risk in California?

KD:

The wildfire risk in California will certainly be changing over time, and it'll be going up in areas and down in other areas. In the long run, as the climate evolves, it's as of yet unclear what that pathway will be. In the short term, what's going to happen today, tomorrow, next year, this year, the additional rain will eventually result in growth that could fuel future fires. It could also result in trees being healthier and being more resistant to pine bark beetles. So it's really hard to say.

And those complexities are further compounded in areas where there have been wildfires and you could potentially have mudslides and erosion result. So it's really complex. I think in the midterm, these rains this year, getting kind of back to normal from a drought standpoint, should be beneficial. But again, that also will encourage the growth of more fuel.

TL:

The natural variability and wildfire risks far outweighs the trend line that we've got. So the focus is on this year, next year. Certainly, the rain brings a lot more foliage and the foliage, when it dries, brings on higher risk. It's not clear if it means higher risk this year though, because we haven't seen the spring rollout yet. If we get a long dry summer, then, yeah, it's Katy, bar the door! But if we see a cool summer where it's soaked into the ground, we don't have as much risk. But that's just delaying, it's deferring the risk. It's there, it's looming, it's coming at us. So, it should be a concern, and you should remain ever vigilant.

MBS:

I'm glad you alluded to that, Tom. It really comes back to the unknown and what we don't expect. You have to just kind of prepare for it. But on that topic of unknown, you made a reference that I have no idea what you were talking about and I could tell Kent had no idea what you were talking about. So you're going to have to define it for our listeners. But you said something about Katy who, what?

TL:

Katy, bar the door! It's an exclamation that means watch out, trouble is on the way. It is an American phrase usually heard in the southern United States, which is why it's not... I don't know how I got it because I didn't grow up in the South.

MBS:

Okay. Well, thank you for the clarification there, Tom. So, this now leads me to then think if this becomes more of a new normal, we've talked about climate change a lot on this podcast, both of you have talked about climate change before on this podcast. If we are leading into wetter winters, more potential for flood, it just begs the question of flood insurance.

And we've talked previously as well too with Tom, with you, we've talked with Scott Giberson. We've talked about how there's not a lot of people that have flood insurance. I think maybe it's 2% of all Californians hold flood insurance. We've talked about how the National Flood Insurance Program, the NFIP, does mandate that you have flood insurance if you are in a designated flood hazard zone, which is not everywhere. We have talked about various events. Hurricane Harvey comes to mind where a lot of the flooding, significant flooding, happened outside of the designated hazard zones. So there's a lot of people that were left without flood insurance. I know I don't have flood insurance on my property because my flood risk is incredibly low and the possibility of my house flooding is very low. Do either of you consider having flood insurance, either now or in the future knowing that things may change?

KD:

I do not, Maiclaire. And similar to the assessment you made on your property, I made the same assessment on mine that the likelihood of my house seeing significant flooding is pretty low. So, I'm choosing to spend that money instead on sending my kids to college. Will that assessment change over time? Possibly. I think another way to look at that is that if you are in a property that is subject to flooding, and a good friend of mine in the East Bay and Berkeley had significant flooding during this event, the question that comes to mind is, do you get insurance? Do you mitigate the risk? Do you raise your house or put up barriers to mitigate the source of flooding might be. And those are all good questions to ask. And the answers are likely very personal and localized, depending on the situation in which your property is.

MBS:

Yeah. Tom, what about you? You or others that you've talked to?

TL:

Yeah, as I walked my neighborhood during and after the storm, I reflected on the flood insurance. There are an awful lot of people that had a loss from a flood. And this represents, even if you can't pay for it, it represents, it's an unplanned-for expense. And that's what we hopefully put aside for insurance. And you do wonder is, what's missing? Why can't we get more people to buy insurance?

Certainly, there are the barriers of communication to get it to concern. If you were to interview people in the street, certainly in California has a Mediterranean climate where it doesn't rain for nine months a year, if you ask them any of the dry period of time, "Is flood on your mind?" No. Kent highlighted it. There are different priorities. And there are barriers. It's a difficult product to offer for insurers. There's not many people buying it. It's very expensive.

But we can consider what are the solutions? Do we mitigate? Are there other alternative types of insurance solutions for this? And maybe a little bit of all the above. When you think of the burdens on homeowners, these surprise losses, you immediately think of insurance. Yet, flood insurance is not widely accepted. It doesn't hit the urgency or the prioritization of homeowners.

KO:

Tom's right. Most people I talk to don't have flood insurance, myself included. I live in Southern California, and I live in a fire zone so severe that I have two different types of fire insurance on my home. But as long as I can remember, we've been living in a drought warning. So the last thing I'm expecting is enough rain to cause a flood. According to California's Wildfire and Forest Resilience Action Plan, there are actually 12 steps that homeowners can take to harden their homes. And you can find out more about those steps and how taking them may help lower insurance premiums in Episode 53.

TL:

Insurers are reluctant to offer it because it's a very expensive coverage to offer if you buy it. It's something that we have to keep on reconsidering. And do we have to have, is it only an indemnity type of insurance policy or are there other ways that we can offer some kind of protection for people who are suffering from these infrequent and rare but devastating losses?

MBS:

Well, infrequent, but potentially even more frequent too is something that needs to be considered. But it leads me to believe too, you both talked about different priorities, and in my head when you talked about different priorities, I prioritized earthquake insurance on this property because of the risk of —when I look at the relative risk of all of the different hazards.

But we actually are in the process of we just have sold this house and we are moving and we're relocating to Southern California. And one of the things that was very important to me was finding a home that was not in a high wildfire risk zone, not in a high flood risk zone. Earthquake's kind of inevitable in California, but it is lower risk than where we are now. And it leads me to question where are we when we think of all of these hazards that we have in California? I don't want to say which is the most important because everything is very localized and everything, it really depends on where you are. Can the two of you just comment just on maybe resilience across California, different types of insurance, flood, earthquake, wildfire? Some of those are mandated. Well, earthquake's not mandated, but flood and wildfire are mandated in certain places. You can't get insurance without them or you can't get a mortgage without them. So can we just talk about this too? What do we think?

KO:

KD:

I guess what I would say is that there are a number of different methods you could go to address these sorts of risks. One: mitigate. So can you make your house safer from a wildfire standpoint? There certainly are a number of ways that you can mitigate wildfire risk on your hyperlocal basis. You can clear brush and shrub, you can maintain your house in a way that it is less prone to being burned in a wildfire. You can retrofit your house for earthquake, you can perform some tasks that would mitigate some of the flood risks. So mitigation's certainly a very highly recommended first step.

Insurance, transferring that risk to an insurer is traditionally a very good way to go. And I think what we have to do as an industry, or what the insurance industry has to do is look to see how can insurance for these perils be sustainable in a regime where those risks may be going up, and in some places they may be going down. So it's a really difficult problem to solve, but one that we need to start working on right now.

MBS:

Tom, anything to add?

TL:

Yeah. Certainly, if we try to understand the perils that could affect homes. I live in the East Bay, I live within 10 kilometers of the Hayward Fault, putting me into a near-field, high-risk earthquake area. I live in a hilly community where floods should always be a concern because the water coming down the street, it could be directed into your house if something happens. I live in a wildfire area of dense trees and brush. I can't point it out. It's that mitigation. We have the resilience is our ability to recover. And we really can't use insurance as our primary blocker. We really have to start thinking about how do I strengthen the home? That's what financial insurance is for, it's to cover those, "Oops, I really didn't see that one coming." But the every day — we have to start rethinking how do we strengthen homes and make these everyday, these types of events, less disruptive.

MBS:

And I think that's a great place to end. How do we make these events less disruptive? Kent, Tom, Tom, Kent, both of you, thank you so much for coming back and joining me today on Core Conversations to chat about the rain that we've had here in California.

KD:

Thanks, Maiclaire. It was great chatting with you and I look forward to further conversations.

TL:

Thank you for inviting me to this conversation, Maiclaire.

MBS:

And thank you for listening. I hope you've enjoyed our latest episode. Please remember to leave us a review and let us know your thoughts and subscribe wherever you get your podcast, to be notified when new episodes are released. And thanks to the team for helping bring this podcast to life producer Jessi Devenyns, editor and sound engineer Romie Aromin, our facts guru Katia Oloy and social media duo Sarah Buck and Makaila Brooks. Tune in next time for another Core Conversation.