Category Archives: Winter Storms

Catastrophes, Disaster Preparedness, Disaster Resilience, Winter Storms

Texas Winter Storm Costs Raise Extreme-Weather Flags for States, Localities

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Last month’s winter storm that left dozens of Texans dead, millions without power, and nearly 15 million with water issues could wind up being the costliest disaster in state history.

Disaster-modeling firm AIR Worldwide says claims volume will likely be significant and, with average claims severity values of $15,000 for residential risks and $30,000 for commercial risks, insured losses “appear likely to exceed $10 billion.”

AIR says several variables could drive the loss well above that amount, including:

  • A higher-than-expected rate of claims among those risks affected by prolonged power outage,
  • Whether utility service interruption coverages pay out;
  • Larger-than-expected impacts from demand surge,
  • Government intervention, and
  • Whether claims related to mold damage start to emerge as a significant source of loss.

FitchRatings says the widespread scale and claims volume of the event could drive ultimate insured losses as high as $20 billion. For context, the state’s insured losses related to Hurricane Harvey were about $20 billion, according to the Texas Department of Insurance. The deadly 2017 hurricane devastated the Gulf Coast region. Last month’s winter storm affected every region of the state.

“All 254 counties will have been impacted in some way by the freeze,” said Lee Loftis, director of government affairs for the Independent Insurance Agents of Texas. “That is just unheard of.”

All Texas counties have received state disaster declarations by Gov. Greg Abbott, opening them up to additional state assistance. But many rural counties are currently excluded from President Biden’s major disaster declaration.

State and local officials say the federal government moved swiftly to approve declarations for 108 counties and that more are likely coming as reports of damage mount. Eighteen of the state’s 20 most populous counties were included in the declarations. But for the 146 counties — many of them rural — the wait is nerve wracking.

Officials say it’s because those counties lack data on damages. Nim Kidd, chief of the Texas Division of Emergency Management, said the state is urging residents to report their property damage through an online damage assessment tool. State officials will report that damage to FEMA in hopes it will lead to more counties being added to the major disaster declaration.

Earl Armstrong, a FEMA spokesperson, said in a statement to the Texas Tribune that homeowners and renters who don’t live in a disaster-designated county should file a claim with their insurer, document damage to their home from the storm, and keep receipts for all expenses related to repairs.

Anomalous as the Texas winter storm may have been, it is a salient data point that all states and municipalities should take to heart in their disaster planning. In December, FEMA proposed “substantively” revising the “estimated cost of assistance” factor the agency uses to review governors’ requests for a federal disaster declaration to “more accurately assess the disaster response capabilities” of the states, District of Columbia and U.S. territories.

In other words, the federal government will likely ask states and municipalities to shoulder more of the cost of recovering from natural catastrophes – making it even more important for every state to prepare for and insure against events that might have seemed unthinkable not so long ago.

And as Texas and other affected states recover, they still have 2021’s severe convective storm and hurricane seasons ahead of them.

Disaster Preparedness, Disaster Resilience, Winter Storms

Why Do Disasters
Keep “Surprising” Us?
A Resilience Culture Would Aid Preparation

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Texas in recent days has become the latest poster child for government failure to prepare for catastrophe.

A Washington Post analysis places last week’s “rolling disaster” – with more than 14 million people in 160 counties experiencing power loss and water-service disruptions due to severe winter weather – alongside the U.S. federal government’s failure to anticipate and prepare for a global pandemic.

“Other such episodes of government caught by surprise are etched in people’s memory,” the article says, citing Hurricane Katrina and the 9/11 terrorist attacks as precedents. “It is rarely the case that these disasters strike without warning…. As many government officials have said, there is little incentive and almost no political reward for investing money to head off a crisis.”

Blame is being apportioned for Texas’s failure to mitigate what now has to be recognized as an inevitable confluence of extreme weather conditions with infrastructure vulnerability. It certainly seems as if investment in a handful of cold-proofing measures for the state’s independent, lightly regulated energy system might have prevented much of the suffering.

But what about other states suffering from service disruptions and their toll in human pain? And what about the next “unforeseen” catastrophe?

Instead of pointing fingers for actions not taken, it might be more productive to focus on developing a national and global culture of resilience; communicating the objective value of understanding, anticipating, and mitigating the impact of natural and man-made risks; and taking steps in advance to promote resilience in the aftermath of events that can’t be avoided. 

This is what Triple-I, its members, and partners have been doing. Our Resilience Accelerator curates and shares data and insights from across the risk-management world with a focus on promoting resilience best practices.  Our Joint Industry Forum annually brings together insurance and risk-management leaders and subject-matter experts to explain and update anyone with an interest in risk on the latest trends, developments, and solutions. We produce webinars, hold educational town halls, and regularly engage with the news media to help inform their coverage.

We also play an active role in helping to close the oft-mentioned “skills gap” in the insurance industry.

“The risks we all face—whether natural or man-made—are top of mind for younger generations,” Triple-I CEO Sean Kevelighan said recently. “We’re beginning to see these future leaders turn to insurance. They are beginning to understand that our 350 years of history, of managing risks of all kinds, is truly a catalyst for solutions. These solutions will result in a more resilient and protected world.”

Homeowners Insurance, Winter Storms

How to survive severe cold weather

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During the deep freeze across multiple states this week, some U.S. electric companies are being forced to pull the plug on consumers in the form of “rolling blackouts” to conserve energy, Insurance Information Institute’s (Triple-I) Scott Holeman reports in the video above.

The severe cold has propelled The Homeowner’s Severe Cold Weather Survival Guide to the “most read” article position at the Triple-I’s website.

Much of North America experiences periods of severely cold weather and is susceptible to snow and ice storms—extreme conditions that can inflict considerable damage on homes and create liability risks. Standard homeowners policies will cover most disasters that result from a freeze—but when the weather outside is frightful, it’s better to minimize the potential risks.

The Survival Guide lists a few steps that can be taken inside and outside a home to reduce risks of property damage, such as:

INSIDE THE HOUSE

Check the location for the main water shutoff in your home. And refresh your memory on—or learn—how the shutoff works to prevent your home’s pipes from bursting.

Open hot and cold faucets enough to let them drip slowly. In severely frigid temperatures, keeping water moving within the pipes will help prevent freezing.

Check to see that fireplaces, wood stoves, and electric heaters are working properly. Make sure no combustible items are near a home’s heat sources. This week’s widespread power outages have contributed to Kerosene Heater Safety becoming the second-most popular article at the Triple-I’s website.

OUTSIDE THE HOUSE

Watch for ice dams near gutter downspouts. Ice dams occur when water is unable to drain through the gutters and instead seeps into the house. Clear gutters of leaves and debris to allow runoff from melting snow and ice to flow freely at the base of the gutter, known as the downspout.

Keep your garage doors closed. This will prevent weather damage to whatever is stored in the garage. Plus, if your garage is attached to your house, the home entrance door from the garage is probably not as well-insulated as an exterior door so this will keep more heat in.

Double-check for dead, damaged, or dangerous tree branches and have them removed. Even if they looked sound earlier in the year, trees can be affected by ice, snow, or wind. When stressed, branches can fall and damage your house or car, or injure someone on or near your property.

The Triple-I has additional winter weather resources:

Snowstorm-Caused Damage Covered Under Auto and Home Policies
Winter Storms
How to file A Homeowner’s Claim
Minimizing winter weather risks
If the power goes out, can you be reimbursed for spoiled food?

Disaster Preparedness, Flood Insurance, Wildfires, Winter Storms

Californians Warned About Mudslide Risk
as Winter Bears Down
on Wildfire Areas

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California Insurance Commissioner Ricardo Lara is alerting citizens to review their insurance policies in order to protect themselves and their assets in anticipation of winter weather bringing the possibility of  floods, mudslides, debris flows, and other disasters to recent wildfire burn areas throughout the state.

The commissioner issued a notice to insurers reminding them of their duty to cover damage from any future mudslide or similar disaster caused by recent wildfires that weakened hillsides. In particular, the United States Geological Survey (USGS) has projected increased likelihood of debris flow for fire-scarred areas of the state in the event of heavy rainfall.

Many Californians may not be aware that homeowners’ and commercial insurance policies typically exclude flood, mudslide, debris flow, and other similar disasters—unless they are directly or indirectly caused by a recent wildfire or another peril covered by the applicable insurance policy. For insurance purposes, it’s important to understand the difference between “mudslides” and “mudflow.” 

Mudslides occur when a mass of earth or rock moves downhill, propelled by gravity. They typically don’t contain enough liquid to seep into your home, and they aren’t eligible for flood insurance coverage.  In fact, mudslides are not covered by any policy. 

Mudflow is covered by flood insurance, which is available from FEMA’s National Flood Insurance Program (NFIP) and a growing number of private insurers. Like flood, mudflow is excluded from standard homeowners and business insurance policies—you must buy the coverage separately. 

The California Department of Insurance has posted a fact sheet for consumers to answer questions about what their policies cover.