On 16 September, Hurricane Sally made landfall on Wednesday near Mobile Bay, Ala., and the western portion of the Florida Panhandle as a Category 2 storm with destructive winds of 105 mph, causing significant rain and storm surge.

The storm moved slowly across Alabama and the Florida Panhandle producing 10-20 inches of rain or more in certain areas, causing significant flood damage, and then moved through Georgia and the Carolinas.

Because Sally appears to be primarily a flood event, Moody’s Investor Service said it expects that the National Flood Insurance Program will absorb significant losses because standard property and casualty homeowners policies do not include flood damage.

P&C (re)insurers will face losses on commercial and some residential properties although loss estimates will take weeks to tally. Most US homeowners are not insured against flood unless they are located in flood zones. The NFIP is the largest nationwide provider of flood insurance to homeowners and covers most flood losses in the US.

Because flood damage is typically not covered by homeowners policies, Moody’s said disputes may arise in cases where the immediate cause of loss (wind or rain from above versus flood) is not clear.