Category Archives: Hurricanes

I.I.I. on Flood Insurance: Time to Act is Now

With the June 1 start of the 2013 Atlantic hurricane season  just one month away the Insurance Information Institute (I.I.I.)  is urging  people to prepare for heightened flood risks that come with hurricanes and tropical storms.

The I.I.I. notes that the most recent two hurricane seasons have shown how devastating the consequences of seasonal flooding can be, with losses felt well beyond the high risk areas nearest the water:

While coastal states have an increased risk of flooding during hurricane season, it is important to note that flood risks extend far beyond those areas. Some of the most severe flooding has occurred when the remnants of a hurricane or tropical storm system traveled inland, such as Hurricane Irene two years ago, producing heavy rainfall hundreds of miles from the coast. For this reason, it is important to have coverage no matter where you live.†

Flood damage is excluded under standard homeowners and renters insurance policies. Residential flood insurance is available in the form of a separate policy primarily from the National Flood Insurance Program (NFIP).

A 2012 poll by the  I.I.I. found that 13 percent of American homeowners had a flood insurance policy, virtually unchanged from the 14 percent of homeowners in 2011, but well below the 17 percent who said they purchased flood insurance in May 2008.

Many homes that sustained flood damage from Superstorm Sandy did not have flood insurance, according to joint research by the Wharton Risk Center and Resources for the Future.

For example, along the entire New York coast, take up rates were lower than 30 percent in most ZIP codes. Take-up rates along the New Jersey coast were apparently higher than New York, particularly in Manhattan.

Check out I.I.I. information on flood insurance here.

CSU on Hurricane Season: “It only takes one”

An active 2013 Atlantic hurricane season appears likely based on the latest predictions of the major forecasters.

In its just-released forecast, Colorado State University’s Tropical Meteorology Project is predicting 18 named tropical storms, including nine hurricanes and four major hurricanes (Category 3-4-5).

The CSU team also put the probability of U.S. major hurricane landfall at about 140 percent of the long-period average. It says:

We anticipate an above-average Atlantic basin hurricane season due to the combination of an anomalously warm tropical Atlantic and a relatively low likelihood of El Nià ±o. Coastal residents are reminded that it only takes one hurricane making landfall to make it an active season for them, and they need to prepare the same for every season, regardless of how much activity is predicted.†

Meanwhile, London-based consortium Tropical Storm Risk is calling for 15 named storms, of which it predicts eight will become hurricanes, and three major hurricanes. TSR forecasts Atlantic basin tropical cyclone activity at about 30 percent above the 1950-2012 long-term norm, but slightly below the recent 2003-2012 10-year norm.

And Weather Services International just issued its forecast of 16 named storms, nine hurricanes and five intense hurricanes, but added that this still may be a bit conservative if the warm tropical ocean temperatures persist heading into the season.

Updated forecasts will be released around June 1, when hurricane season opens.

Artemis blog has a great round-up of the latest forecasts on its 2013 Atlantic Hurricane Season page.

Also check out this recap of the 2012 hurricane season, courtesy of NOAA Visualizations:

Marine Insurers Feel the Impact of Sandy too

As we look ahead to the start of the 2013 Atlantic hurricane season marine insurers are among those that will be closely monitoring forecast storm activity.

Annual spring statistics recently released by the International Union of Marine Insurance (IUMI) noted that the cost of Superstorm Sandy to the global marine market has been put at between $2.5 billion to $3 billion – effectively wiping out the entire U.S. marine premiums for 2012.

The statistics which cover the cargo, ocean hull and offshore energy sectors remain a litmus test for the marine insurance market and the impact of Sandy will define 2012 in the eyes of underwriters, IUMI said.

While Superstorm Sandy’s main areas of impact were the states of New York and New Jersey, it was one of the largest storms ever and its impact stretched over 1,000 miles from the Great Lakes to Boston.

In its  analysis of the cargo market, IUMI noted:

The total insured loss from Sandy is currently estimated to be between $25 billion-$30 billion of which approximately 10 percent or $2.5 billion-$3 billion is for the marine business.

It’s still unclear how much of that was for ocean cargo, but we do know that major industry groups such as automotive, coffee/cocoa trade and fine arts were particularly hard hit. There is also a substantial inland marine loss.

To put the claim in perspective this one loss has eroded an entire years worth of premium for the whole U.S. marine market.†

Insurance Journal has more on this story here.

Lessons learned from Superstorm Sandy are among the topics to be addressed at the 20th Biennial Marine Insurance Issues Seminar sponsored by the American Institute of Marine Underwriters (AIMU) on May 8 in New York City. The conference will be held at the New York Marriott Downtown, 85 West St.

To register for the seminar or for further information click here.

Wrapping Up Another Active Hurricane Season

The 2012 Atlantic hurricane season officially comes to a close today  Ã¢â‚¬“ another active season and one that produced 19 named storms, of which 10 became hurricanes and one became a major hurricane, according to NOAA’s recap.

However, as NOAA says, this year proved it’s wrong to think that only major hurricanes can ruin lives and impact local economies.

Four storms made U.S. landfall this year, including devastating post-tropical cyclone Sandy in New Jersey and Hurricane Isaac in Louisiana.

This season marks the second consecutive year that the mid-Atlantic and Northeast suffered devastating impacts from a named storm. NOAA  reminds us  that both Sandy, and Irene last year, caused fatalities, injuries, and tremendous destruction from coastal storm surge, heavy rainfall, inland flooding, and wind.

A press release cites Laura Furgione, acting director of NOAA’s National Weather Service:

We are hopeful that after the 2012 hurricane season, more families and businesses all along the Atlantic and Gulf Coasts become more “weather ready† by understanding the risks associated with living near the coastline.†

Here’s the 2012 Atlantic hurricane season recap in 4.5 minutes, courtesy of NOAA Vizualizations:

Dr. Jeff Masters offers his  take on the season over at Wunderblog.

Additional I.I.I. facts+stats on the season are available here.

 

Climate Change and Hurricane Sandy

As we basked in 70 degree temperatures in parts of the Northeast on Sunday, just a few days in the wake of a nor’easter and nearly two weeks after Hurricane Sandy, it’s understandable that the topic of climate change is trending online.

In a post over at the Wall Street Journal’s Metropolis blog, Eric Holthaus asks the direct question: did climate change factor into recent storms?

He cites the connection between long-term sea level rise and the enhanced coastal flooding that devastated parts of Greater New York as evidence of a much clearer link between Sandy and climate change.

New York Harbor’s average water level is now 12 to 18 inches higher than it was in the 1880s, Holthaus says, and scientists estimate about 8 to 12 inches of that is a direct result of global warming. So, more people were affected in the tri-state during Hurricane Sandy than would have been if the same storm had struck in a world without climate change.

He concludes:

For the victims of Hurricane Sandy, it may come as little consolation, but history may show them to be—with absolute certainty—among the first people in the United States directly affected by climate change.”

In another post over at Scientific American’s Observations blog, Mark Fischetti writes that scientists, journalists and even insurers are starting to drop the caveats, and simply say that climate change is causing big storms.

Fischetti suggests that as scientists collect more and more data over time, more of them will be willing to make the same data-based statements.

A recent study by Munich Re reported that North America was most affected by the rising number of natural catastrophes. Specifically, it noted a nearly five-fold increase in the number of weather related loss events in North America for the past 30 years, compared with an increase of 4 in Asia, 2.5 in Africa, 2 in Europe and 1.5 in South America.

In a press release announcing the study, Munich Re said:

Climate change particularly affects formation of heat-waves, droughts, intense precipitation events, and in the long run more probably also tropical cyclone intensity. The view that weather extremes are becoming more frequent and intense in various regions due to global warming is in keeping with current scientific findings†¦Ã¢â‚¬ 

Munich Re  added:

Up to now, however, the increasing losses caused by weather related natural catastrophes have been primarily driven by socio-economic factors, such as population growth, urban sprawl and increasing wealth.†

Check out I.I.I. information on climate change and insurance.

Post-Sandy: What You Need to Know

As a resident of Essex County, New Jersey, it’s been a surreal week. Superstorm Sandy caused damage in U.S. East coast communities from Virginia to Maine, but especially in the New York/New Jersey region.

Latest estimates from catastrophe modeler Eqecat put insured losses at up to $20 billion and total economic damage at up to $50 billion.

Eqecat said a number of factors influenced its revised estimates including large electric and utility losses that will trigger significantly more insured losses (business interruption) than were expected.

As my neighbors deal with downed trees, damaged homes, lack of power/heat and food spoilage, I’ve been asked a few questions on insurance coverage.

Here are  my top 3, with reference to the Insurance Information Institute’s (I.I.I.) Hurricane Sandy FAQs:

1. A tree fell on my house or garage, can I file a claim?

The short answer is yes. If a tree hit your home, that damage is covered under your homeowners insurance policy. If your tree fell on your neighbor’s home or garage, his or her insurer would pay for the damage; however, if the felled tree was poorly maintained or diseased and you took no steps to take care of it, their insurer may seek reimbursement from you for the damages. Homeowners insurance policies do not pay for removal of trees or landscaping debris that did no damage to an insured structure.

2. The power went out during the storm and I had to throw out all the spoiled food in the refrigerator and freezer, is this covered?

Following a hurricane, some insurance companies may include food-spoilage coverage, usually for a set amount that can range from $250 to $500 per appliance. Check with your agent or insurance company.

3. Should I still file a claim if I think the damage is less than my deductible?

Yes. Sometimes there may be additional damage that becomes evident in the months following a significant storm. Filing a claim, even if the damage total is under your deductible, will protect you in the event further repairs are needed. And if your home suffers damage from more than one storm in a single season, the damage from the first storm may apply toward the deductible amount.

Sandy Accelerating To Landfall

As Hurricane Sandy makes its final approach towards the New Jersey/New York area with landfall expected this evening, insurers are closely monitoring the storm and ready to respond to the needs of their policyholders.

The Wall Street Journal reports that insurers are assembling rapid-response teams along the Eastern seaboard and preparing to deploy claims specialists into hard-hit communities once the storm passes by.

In its 8am EDT advisory, the National Hurricane Center (NHC) says Sandy is expected to transition into a frontal or wintertime low pressure system prior to landfall:

However†¦This transition will not be accompanied by a weakening of the system†¦and in fact†¦a little strengthening is possible during this process. Sandy is expected to weaken after moving inland.†

See the NHC’s statement about Sandy’s transition to a post-tropical cyclone here.

It’s important to recognize that hurricane-force winds extend outward up to 175 miles from Sandy’s center and tropical-storm-force winds extend outward up to 485 miles, making this a very expansive storm.

Insurers play a vital role in helping individuals and businesses recover from the potentially devastating effects of disaster such as a catastrophic hurricane, according to the Insurance Information Institute (I.I.I.).

Insured catastrophe losses in the United States totaled $35.9 billion in 2011, well above the 2000 to 2010 average of $23.8 billion (in 2011 dollars) according to figures from Munich Re. Thunderstorms, including tornado events, were the costliest type of natural disaster in 2011, based on insured losses (over $25 billion). However, tropical cyclones, which include hurricanes, were the second most costly event category ($5.5 billion in insured losses), with Hurricane Irene accounting for most of the losses ($5 billion, including flood losses covered under the National Flood Insurance Program).

Catastrophe modelers AIR Worldwide and EQECAT are posting regular updates on the storm’s approach and expected damage to the Northeast.

U.S. East Coast Eyes Sandy

As Hurricane Sandy’s #Frankenstorm tag gathers momentum on Twitter, so does the size of the actual storm.

In its 8am EDT outlook, the National Hurricane Center (NHC) noted that tropical storm force winds extend outward up to 275 miles from the center and that Sandy’s wind field is expected to grow in size during the next couple of days.

Sandy is currently a Category one hurricane on the Saffir-Simpson hurricane wind scale, but some weakening is possible during the next day or so, the NHC said.

The current forecast track from the NHC brings Sandy to landfall along the Delaware/New Jersey coastline early Tuesday (see below).

Regardless of the exact track of the storm, these images show the size of the wind and rain event that the U.S. east coast can expect.

 

Check out iii.org for answers to all your  insurance coverage questions.

Sandy Strengthens

A tropical storm watch is now in effect for Southeast Florida and the Upper Keys as Tropical Storm Sandy continues to strengthen and moves towards Jamaica.

In its 8am EDT outlook, the National Hurricane Center (NHC) says Sandy is expected to become a hurricane before it reaches Jamaica and Cuba, later today.

The NHC notes:

Tropical storm conditions are expected to reach Jamaica this morning†¦with hurricane conditions expected by this afternoon. Tropical storm conditions are expected in portions of Haiti by this afternoon. Hurricane conditions are possible in eastern Cuba by this evening. Tropical storm conditions are expected in the central Bahamas by early Thursday†¦and in the northwestern Bahamas by Thursday afternoon.†

It adds:

Tropical storm conditions are possible along the southeast Florida coast†¦the Upper Keys†¦and Florida Bay by Friday morning.†

Jamaica, Haiti and the Bahamas are members of the Caribbean Catastrophe Risk Insurance Facility (CCRIF), a multinational insurance pool developed by the World Bank. Funded by premiums paid by participating countries, the facility provides early payout to members after a major hurricane or earthquake.

Check out I.I.I. hurricane facts+stats.

October Hurricanes

The National Hurricane Center (NHC) has given a tropical system located about 300 miles south of Jamaica a 90 percent chance of becoming a tropical cyclone during the next 48 hours.

In its 8am EDT tropical weather outlook, the NHC said:

Heavy rains from this disturbance are likely to spread over Jamaica†¦Hispaniola†¦and Eastern Cuba during the next several days. These rains could produce life-threatening flash floods and mud slides†¦especially in areas of high terrain.†

A Hurricane Hunter aircraft is scheduled to investigate the system this afternoon.

With six weeks left to the official end of the 2012 Atlantic hurricane season which runs from June 1 to November 30, it’s important to keep an eye on the potential track of “Sandy†.

Here’s a visual of the latest modeled tracks for the system, courtesy of Weather Underground. It’s worth noting that some of the computer models  have “Sandy” approaching the east coast by next weekend:

October hurricanes can be costly.

Remember 2005? Hurricane Wilma today ranks as the fourth most costly hurricane in the U.S., according to the Insurance Information Institute (I.I.I.).

Hurricane Wilma, which made landfall as a Category 3 hurricane down in Florida on October 24, 2005, produced insured losses of $10.3 billion, or $11.7 billion in 2011 dollars.