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Weather Patterns to Watch for P&C Insurance: Derechos & More

By September 24, 2020February 27th, 2024No Comments

Unusual weather patterns have many insurers on their toes.

When a rare storm hits a new region, it raises questions about the types of property and casualty coverage offered in the area. Many plans along the east coast exclude hurricane damage from coverage unless specified, and inland areas are even less likely to be offered coverage against extreme storms.

WaterStreet Company is here to help inform insurers of ongoing trends in the P&C Insurance Industry. We offer cloud-based, adaptable Policy Administration Systems to grow with your company.

How Can P&C Technology Help Spot Risk?

Property and Casualty insurers can rely on historical location data to help inform their risk-assessment process.

With WaterStreet Company, insurers have access to any number of third-party integrations for pulling this essential data into the system. Inform underwriters of a property’s history of claims, and identify areas that are at greater risk to damage. Insurers can use this information to craft plans aimed at higher risk locations.

Crop insurance is an area that insurers may seek to expand. While home and auto insurance can cover wind damage, and flood insurance is typically an added-on coverage or offered through the Federal Flood Insurance Program, farmland is at a high risk to extreme weather, leading farmers to research this coverage. Particularly in 2020, extreme weather has shaken many diverse parts of the United States.

Talk to us today to learn more about our supportive technology.

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3 Weather Patterns to Watch

1. Derecho Storms

On August 10th 2020, Iowa made headlines as it was affected by the sweeping winds of a derecho storm. According to the National Weather Service, winds peaked at 120 mph, tearing through croplands, highways and residential homes.

What is a derecho wind storm?

Derecho wind storms, named after the Spanish word for “straight,” are fast-moving storms that travel as a wall in a linear path with high winds and rain reaching over 100 mph and traveling a distance of over 240 miles. These storms are also called bow echos or squalls and may result in tornadoes.

What causes a derecho wind storm?

Derechos begin as a cluster of thunderstorms driven by strong unidirectional winds. As the cool rain hits warm and humid air, the storms intensify by pushing warm, moist air up into the storm’s upper complex, spanning many miles until the derecho hits a lower temperature region.

How often do derechos happen?

Derechos are more common than you might think. These storms primarily happen between the warm months of April and August, and could hit around half of US states. According to EarthSky, a small region between Kansas and Arkansas sees an average of four derechos every 3 years, and a much larger region between Texas, Michigan and Pennsylvania sees one derecho per year. Previous to the Iowa derecho this year, two others occurred on separate sides of the country. One on June 3rd, affecting Pennsylvania and New Jersey, and another on June 6th, affecting Colorado.

2. Tornadoes

Tornadoes are most common in the central United States, affecting states along “Tornado Alley,” a location spanning from Texas up to South Dakota. April of 2020 was noted as the second highest most-active month for tornadoes in recorded history with 351 in one month.

What is a tornado?

Tornados are extreme rotating wind columns with winds reaching up to 300 mph. Rope tornadoes are the most common, which are small and can be short lasting. Cone tornados are the most commonly recognized while wedge tornadoes are the most destructive.

What causes a tornado?

Tornadoes are caused by the collision between warm humid air with cold dry air, the same conditions leading to a thunderstorm. The combined temperatures cause an updraft, pushing the warm air up, and can lead to a rapid spiral within a thunderstorm cloud, sometimes touching down and creating a tornado.

How often do tornadoes happen?

Three areas of the United States see the most tornado development according to the NOAA: Tornado Alley along the southern plains, the state of Florida, and Dixie Alley, a region above the Golf of Mexico. An average of over 1,000 tornadoes hit each year with around 77% of those considered “weak.”

3. Hurricanes

Hurricanes are the most notorious of all weather patterns in the P&C Insurance industry as these storms tend to affect large, densely-populated areas with severe winds and flooding, causing surges in expensive claims. The 2020 hurricane season is estimated to be “extremely active.”

What is a hurricane?

Hurricanes are storms that form over tropical waters and become spinning cyclones. They are broken into 5 Categories, ranging from winds as low as 74 mph to over 300mph, accompanied by a downpour of rain.

What causes a hurricane?

Similar to tornadoes, hurricanes are caused when warm air rises to create storm clouds, mixing into cold air that also begins to warm and rise. This causes a spinning effect that is fueled by large, warm bodies of water. Low pressure zones cause strong winds and heavy rains, intensifying the storm.

How often do hurricanes happen?

For 2020, it’s estimated that there will be 24 named storms, five of which will lie between Category 3 and 5. According to Weather.Gov, around 10 tropical storms occur each year between the Atlantic and Golf regions, with six of those becoming hurricanes. It’s estimated that five hit the United States every three years.

The WaterStreet Advantage

Be aware of the high risk locations across the United States. Weather patterns have shifted during recent times, leading to new predictions and unexpected risk. Be sure to rely on the best technology available to stay competitive in the P&C Insurance Industry.

Reach out to WaterStreet Company today to request a consultation and demo.

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