Facts + Statistics: Winter storms

Winter storms caused $1.1 billion in insured losses in 2020 in 2021 dollars, down from $2 billion in 2019, according to Aon. Winter storms include snow, ice, freezing and flooding. In the first half of 2021, winter storms caused a record $15.1 billion in insured losses, almost totally due to the February 12 to 22 winter storms that affected a large area of the United States, especially Texas, as detailed below.

From February 12 to 22, 2021, Texas became the center of significant winter weather that spread from Oregon and Washington state into the Plains, the Midwest, Southeast, Mid-Atlantic and Northeast states. According to Aon’s July 29, 2021 report, a dome of Arctic air affected by the Polar Vortex caused a prolonged and historic stretch of abnormally cold temperatures and dangerous wind chills. Record low temperatures were reported in states from Minnesota to as far south as Texas and Mississippi. Perils included heavy snowfall, freezing rain, ice and severe thunderstorms. On February 16 the lower 48 states had snow covering 73.2 percent of its landmass, the highest daily total since record-keeping began in 2003. Texas was the hardest-hit state with sub-freezing temperatures for close to seven consecutive days.

Texas suffered about 425,000 insurance claims as of June 18, 2021, according to the Texas Department of Insurance and insurers had paid out $4.0 billion for about 253,000 claims. The average paid loss in Texas was $15,500.  Power outages lasted for days after the Texas power grid failed, leading to 210 deaths, most from subfreezing temperatures. Aon said that the state’s inadequately weatherized electrical grid, limited preparation for a severe winter weather event, and a lack of investment into infrastructure maintenance to handle increasingly volatile weather conditions contributed to the freeze. Texas is also experiencing a population boom that has been adding stress to the electrical grid during periods of high usage, whether from heat waves or cold snaps. The severity and length of the freeze caused many instances of burst pipes in residential and commercial properties, which along with the lengthy power outages, resulted in widespread damage.

An early report from Karen Clark & Company estimated losses from the freeze at $18 billion; an October 2021 report from Lloyd’s estimated the losses to total as much as $20 billion. The final cost to the insurance industry will not be known until the end of 2021 at the earliest, as the price of lumber is impacting repairs, and business income interruption claims are still being processed. Previously the March 1993 blizzard, which affected 24 states, held the record with $3.6 billion in damages in 2020 dollars.