Catastrophes

Residual market property plans – 2016

Executive summary

 

  • The exposure value of the residual property market in hurricane-exposed states continues its decline from the peak levels seen in 2011. Between 2011 and 2014, total exposure to loss in the plans fell by almost 30 percent to $639 billion. Policy counts in 2014—at around 2.8 million—are also down from their 2011 highs.

 

 

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The Northridge, CA, Earthquake 20 Years After: Facts, Figures and Perspectives

The Northridge, California, earthquake of 1994 was the costliest earthquake in U.S. history in terms of insured losses.

Background on: Wildfires

The topic

As many as 90 percent of wildland fires in the United States are caused by humans, according to the U.S. Department of Interior. Some human-caused fires result from campfires left unattended, the burning of debris, negligently discarded cigarettes and intentional acts of arson. The remaining 10 percent are started by lightning or lava.

Background on: Flood insurance

The topic

Flooding is the most common and costly natural disaster in the United States, causing billions in economic losses each year. Most U.S. natural disasters declared by the president involve flooding.

There is no coverage for flooding in standard homeowners or renters policies or in most commercial property insurance policies. Coverage is available in a separate policy from the National Flood Insurance Program (NFIP) and from a few private insurers. Despite efforts to publicize this, many people exposed to the risk of floods still fail to purchase flood insurance.

Spotlight on: Catastrophes - Insurance issues

The topic

The term “catastrophe” in the property insurance industry denotes a natural or man-made disaster that is unusually severe. An event is designated a catastrophe by the industry when claims are expected to reach a certain dollar threshold, currently set at $25 million, and more than a certain number of policyholders and insurance companies are affected.

Background on: Hurricane and windstorm deductibles

The Topic

After Hurricane Andrew in 1992, insurers realized that losses from hurricanes could be much higher than they had previously thought. Hurricane Katrina, in 2005, which cost insurers more than $41 billion at the time, confirmed their fears. After these extraordinary losses, reinsurance companies, insurers that share the cost of claims with primary companies, such as homeowners insurers, said that they could not assume so much risk and that primary companies must reduce their potential losses.

Background on: Earthquake insurance and risk

 

The topic

An earthquake is a sudden and rapid shaking of the earth caused by the breaking and shifting of rock beneath the earth’s surface. This shaking can sometimes trigger landslides, avalanches, flash floods, fires and tsunamis. Unlike other natural disasters such as hurricanes, there are no specific seasons for earthquakes.

Background on: Climate change and insurance issues

The topic

There is now a consensus among the scientific community that the climate is changing, with potential risk to the global economy, ecology, and human health and well-being. But how much of this is due to natural phenomena and how much to the effects of human activity is a matter of debate. Also unknown is the extent to which weather patterns have already been affected. Any increase in damage and litigation over damage is likely to raise insurance company losses. What, then, are insurance companies doing to lessen the impact of global warming?

Facts + Statistics: Wildfires

Wildland fires

As many as 90 percent of wildland fires in the United States are caused by humans, according to the U.S. Department of Interior. Some human-caused fires result from campfires left unattended, the burning of debris, negligently discarded cigarettes and intentional acts of arson. The remaining 10 percent are started by lightning or lava.

Facts + Statistics: Flood insurance

National Flood Insurance Program

Flood damage is excluded under standard homeowners and renters insurance policies. However, flood coverage is available in the form of a separate policy both from the National Flood Insurance Program (NFIP) and from a few private insurers.                                          

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