Insurers prepare for the seasonal increase in claims brought by hurricanes as we enter the fall of 2021.
Carriers must review offerings to ensure their ability to provide plans covering these detrimental expenses, and the insured must deal with property damage, increased premiums and price shopping for better options.
Hurricane season is the root cause of this cycle and is often unpredictable until experts weigh in on the trends and named storms begin to surge. WaterStreet Company’s P&C Insurance Solutions allow carriers to access all the data they need to form predictions on where these costs are headed.
Hurricane Season 2021
According to the NOAA, fall of 2021 is forecasted to be an “extremely active” hurricane season with a 60% chance of an above-normal season. This year is likely to be less active than last year despite several factors leading to an extremely active prediction, including warmer than average surface temperatures in the Atlantic Ocean and an enhanced west African Monsoon season.
Hurricanes primarily affect states along the Atlantic Basin, stretching from Texas to Florida and up through Maine, between the months of June and November.
These are the top five states with the highest number of single-family homes at risk from a Category 5 hurricane:
- New Jersey
- New York
It’s estimated by the Insurance Information Institute that 18 named storms will occur in 2021 and four are likely to lie between Category 3 and 5.
The Costs of Hurricane Ida
The first major hurricane to hit the United States this year occurred on August 29th, 2021. Hurricane Ida was the fifth strongest hurricane to ever hit the US mainland and the second most damaging for the state of Louisiana. Ida traveled slowly from Louisiana to northeastern states, including New Jersey and New York, flooding subway systems, closing major highways and causing tornadoes.
The Insurance Business Magazine estimates property losses could range from $17 to $25 billion. It’s estimated 14,000 people remain displaced following Hurricane Ida, and over 430,000 remain without power nine days following the hurricane.
The Costs of Hurricane Season
The damage and resulting costs left by a hurricane can vary, but is not entirely up to the Category of the hurricane. Tropical storms may also bring torrential flooding, and as storms appear back to back, further damage can occur from a weaker following storm.
These are the top most expensive hurricanes to hit the United States by nominal damage:
- Katrina, 2005 – $125 B
- Harvey, 2017 – $125 B
- Maria, 2017 – $90 B
- Irma, 2017 – $77.2 B
- Sandy, 2012 – $68.7 B
House Logic estimates annual hurricane coverage can vary between as low as $300 to as high as $20,000, depending on the value of the home and the area’s risk.
One benefit to carriers with a cloud-based P&C Insurance Solution is the ability to integrate with third-party data. The insurer is able to bring location data into the system from any number of third-party solutions, better informing underwriters of the risks for a home’s location. These solutions can also allow for self-inspections, which give the insured tools to document areas of the home proving they’ve made adjustments to the home to minimize risk.
Speak with us today to learn more.
Coverage for Hurricane Season
All carriers offer unique coverage for homeowners insurance. Most do not include flooding, and many do not include wind protection. Some insurers exclude damage from hurricanes altogether, allowing specialized insurers to tap into market demand for homeowners in at-risk areas with supplemental coverage.
Florida is a key example as the most at-risk state. More than 41% of hurricanes to hit the United States affect Florida. Hurricane coverage in this state calls for Windstorm Insurance or state-administered plans for the highest-risk areas. The National Flood Insurance Program generally offers flood insurance coverage to most homeowners.
It’s important for insurers to adapt quickly to new buyers and market changes as a reflection of hurricane season.
WaterStreet P&C Solutions
WaterStreet Company aims to keep your insurance business within one unified system. Access all policy, claims, and billing data with 60+ standard reports and data integrations throughout for informing the policy lifecycle. Customers gain access to their own white-label Insured Portal for easy communication and document sharing.
We aim to provide insurers a cloud-based solution with an advanced API for your solution to grow with the company. We understand the importance for carriers and MGAs to adapt to market changes. Ask us about our additional services for accounting, policy, distribution and customer service support.
Reach out to WaterStreet Company today to request a consultation and demo.