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Standing atop the Morrisville Levee in the borough of Morrisville, Pa., it's easy to comprehend the barrier's role in the great divide between the elements of water and earth; the former always in motion, the latter almost always at rest.

Looking north, the Delaware River courses quietly past Trenton, N.J., and the gold-leaf New Jersey Statehouse, then slips under the Lower Trenton Bridge and the U.S. Route 1 bridge, before taking a dramatic 90-degree turn on its way south past Philadelphia before finally emptying into Delaware Bay more than 60 miles away.

To the south of the levee, on Delmorr, Park and Central avenues, immediately behind the mile-long barrier, Little League baseball heats up under the floodlights in Williamson Park even as the light lingers into the summer evenings.

But come spring, when the river swells with snowmelt, or in the wake of heavy rains, runoff from the Delaware River watershed hundreds of miles to the north swell the river and it occasionally rises by 30 feet or more.

From a viewing angle atop the Morrisville Levee, is it clear just what kind of damage breached or leaking levees can inflict.

On April 3, 2005, the river crested at 34.07 feet, 12 feet above flood stage. "That was the highest I've seen it," said Robert Seward, emergency management coordinator for Morrisville. "We had water on the streets, and we sandbagged around cellars."

The levee held, but more than 25 homes, Williamson Park and the Morrisville Community Pool were inundated when a spillway channeling water from the Delaware Canal into the Delaware River overflowed after a floodgate malfunction.

Nearly five months later, more than 1,300 miles to the southwest, Morrisville residents and the rest of the nation watched in utter horror as trillions of gallons of water breached levees outside New Orleans in the wake of Hurricane Katrina. As much as 80 percent of the city was submerged.

Property losses in connection with Hurricane Katrina alone, one of three major hurricanes to make U.S. landfall in 2005, soared to $41.1 billion. The federal National Flood Insurance Program paid out another $17.7 billion in claims for the three hurricanes, according to industry data.

The hurricane season that year -- which drowned property values under billions of dollars of losses -- was a turning point in the history of the nation's levee system. It galvanized the government to act.

Lawmakers passed the National Levee Safety Program Act, convened the National Committee on Levee Safety, and expanded and updated the National Levee Database maintained by the U.S. Army Corps of Engineers.

"Hurricane Katrina woke everybody up," said Joe Stavish, senior vice president and national director in the Property Risk Control unit of the Strategic Outcomes Practice of Willis Group Holdings Ltd.

Today, the Big Easy is better protected than it has ever been, government officials said, thanks to the completion of a multiyear, $15-billion state-of-the-art flood-control project forming a 133-mile perimeter around the city.

"From a flood-protection standpoint, New Orleans is no doubt safer than it used to be before Katrina," said Warren Perkins, vice president and risk manager for Boh Bros. Construction Co. LLC. "The $15 billion spent has seriously addressed the city's flood shortcomings."

Said to be the most advanced flood-control system of its kind anywhere in the world, the Greater New Orleans Hurricane and Storm Damage Risk Reduction System became fully operational for the first time earlier this year.

Though the system has yet to be tested by hurricane forces, Michael L. Owens, vice president of Willis Group in New Orleans, said heavy rains last September from Tropical Storm Lee resulted in no flood claims coming through his office. His conclusion: The updated pumps that draw water out of metropolitan New Orleans kept up with the rainfall.

"The hope is that this protection will increase the capacity, the amount of limit carriers can put out for New Orleans," he said.

Private commercial insurance rates for New Orleans in the fourth quarter of last year, however, were up anywhere from 10 percent, 20 percent and even 50 percent, Owens said. The increases were due in part to the RMS 11.0 model used by underwriters, the overall impact of natural disasters in Thailand and Japan last year, and the Mississippi River flooding.

"The general sense here in New Orleans on the ground is that we have $15 billion in new protection from flood and storm surge, therefore, the city is better protected than ever, yet insureds are still having to swallow large property rates increases in a very difficult economy," Owens said. "That seems counterintuitive."

riverine flooding

Three years after hurricanes Katrina, Rita and Wilma tore into the Gulf Coast, record rainfall swelled the Mississippi River. In the Upper Mississippi River System on June 22, 2008, water washed over 24 levee systems located on the river between Iowa, Illinois and Missouri, according to U.S. Army Corps data cited by geoengineering researchers. Another 28 levee systems were at risk of being "overtopped" by flood waters.

By the time the waters had receded and the government got around to settling claims, the NFIP was facing another $3.4 billion in payouts.

Riverine levee failures aren't without precedent. Previous breaches date back to 1928, when 2,500 people lost their lives in the Okeechobee Hurricane. Since then, flood-related levee failures have struck in California, Nevada, Kansas, Missouri and Oregon, according to a report by the National Committee on Levee Safety.

Clive Goodwin, manager of natural hazard underwriting with FM Global, the Rhode Island-based commercial property underwriter, said many of his clients operating behind levees have little idea of the quality of the protection that those levees provide.

"We don't look at flood as being black or white," Goodwin said. "We look at the scenarios that the location is exposed to."

The weaker the levee, the higher the risk to the people and property located behind it, but other factors play a role as well. A weak levee in the middle of Iowa farmland poses a lesser risk than a stronger levee protecting millions of dollars in property values on the outskirts of St. Louis, where loss severity is amplified.

The 100-year flood-protection requirement, which requires levees to hold back water from the kind of flooding expected once in 100 years, is a misnomer. People behind levees are not as safe as they believe.

A levee built to protect people from a 100-year level of flood protection means there's, in fact, a 26 percent chance of flooding during the life of a typical 30-year mortgage, according to a draft report by the National Committee on Levee Safety.

Only with a 500-year level of flood protection does the chance of flooding over the life of a 30-year mortgage recede into the single digits.

There are a total of 14,500 levees included in the National Levee Database, according to an Army Corps spokesman. The levees are built and certified to Army Corps standards -- which require levees to withstand floods that occur once every 100 years. As much as 85 percent of the nation's levees are maintained by state and local governments, or the private sector, and the federal government is responsible for maintaining the remaining 15 percent. The Army Corps doesn't conduct flood modeling based upon the differences among periodic inspections of the levees in its Levee Safety Program, a spokesman for the Army Corps said.

The patchwork of maintenance around levees, coupled with land-use decisions made at the local level, means the "history of maintenance of levees is all over the place," Goodwin said, noting that each levee needs to be evaluated individually.

As a result, disparities have emerged in the quality of the levees. Property owners in a community with a levee deemed "acceptable," will benefit from federal help to improve the barrier, while residents in the next community with a levee with an "unacceptable" rating may be saddled with the costs.

In Yazoo County, Miss., the 16.5-mile-long Yazoo Levees in Central Mississippi are listed in "minimally acceptable" condition, for example, while its cousins, the 11.1 mile-long Yazoo Levees in South Mississippi are considered flat out "unacceptable," according to the National Levee Database.

With local governments strapped for cash, many of the necessary repairs to levees are delayed unless the federal government steps in.

"I would not live in a house with a levee 20 feet higher than the house," said Global Risk Miyamoto CEO Tom Chan, who has analyzed parts of the nation's levee system and considers many levees around the country to be "under engineered."

Though rare, Chan said, he has seen normal water flow through a levee run as high as 20 feet above rooftops in some areas. A high water line of 2 feet above the foundation would be the "minimum acceptance criteria," he said.

People living with water flowing at or near rooftop levels need to have a lot of confidence in the levee, Chan said. And many property owners living near levees do, though at their own peril. "Some people are not buying National Flood Insurance Protection coverage because they feel safe and they say they are protected by the levee," Stavish said. "But, the reality is that the levee minimizes the probability of the flood loss but does not guarantee against it."

Lacking a central, integrated command and management structure has made it difficult to maintain consistent operating standards for each levee system, even with the accreditation process of the Federal Emergency Management Agency, according to the National Committee on Levee Safety in a report to Congress in 2009.

Uncertainty surrounding the location, performance and condition of levees, and the lack of oversight, standards and communication of risk, has helped to undermine efforts to mount a consistent approach to improving the levees, according to the NCLS report.

Commercial and residential development has pushed further into areas behind levees, said Peter Willse, vice president and director of research for XL Global Asset Protection Services Inc.

"Now, more water is running quicker into rivers," Willse said. "Elevations of rivers are running higher."

Built over the past century, originally by farmers to protect farmland, many levees contain what engineers call "hydraulic fill," or dirt and debris deposited by the water itself. Over time, the ground under the levee can shift, allowing water to seep from beneath. Trees take root along the levee walls, weakening the barriers. Gates and spillways connected to the levee sometimes fail.

"Levees are designed to prevent flooding up to a certain level that is determined at a specified return period," said Boyko Dodov, principal scientist in research and modeling with catastrophe modeler AIR Worldwide, in an email to Risk & Insurance®. But, because the conditions of levees vary so much from one location to the next, they may "fail at flood levels below what they were designed to do."

AIR Worldwide will incorporate the latest levee locations, levee conditions and flood data from FEMA and the Army Corps in its U.S. Flood Model due for release in 2014, Dodov said.

CYRIL TUOHY is managing editor of Risk & Insurance®. He can be reached at ctuohy@lrp.com.

July 24, 2012

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