Winter storms can bring about a wide array of property damage, leaving insurers to grapple with high claim costs. As the frequency and intensity of winter storms continue to rise, it is important for insurers to develop effective strategies for mitigation.
WaterStreet Company is here to help insurers with digital-first strategies. We offer cloud-based Policy Administration for P&C insurance, designed by insurance experts for insurance experts.
Despite trends with warming global temperatures, many areas of the United States have experienced greater precipitation events compared to past decades.
While the length of winter has become shorter in many areas, greater snow precipitation occurs, causing severe and unexpected blizzards, according to National Geographic. Storms during winter can bring high winds, sudden chills and several inches to feet of snow. They may arrive as blizzards, lake effect storms, ice storms, sleet storms, or dense fog.
Winter storms can wreak havoc on both residential and commercial properties, causing a range of damage that insurers must contend with.
Some policyholders may not realize the stress and costs that come with winter storms. While hurricanes, tornadoes, and other warmer-weather events are known for their wide range of destruction, damage caused by winter storms often comes down to personal preparedness.
Homes at risk of catastrophic damage during the winter are often unprepared, unmaintained and uneducated of the risks. This is why insurers can play a pivotal role in helping property owners mitigate damage.
Here is the most common property damage caused by winter storms. While these are not always the most expensive, they are the most notorious for homeowners and auto owners.
One of the most prevalent issues during winter storms is frozen pipes. When temperatures drop significantly, water inside pipes can freeze, causing them to burst. This can lead to significant water damage to the property, including structural damage, ruined belongings, and mold infestations.
Heavy snow accumulation and ice dams can put a tremendous strain on roofs. This can result in structural damage, leaks, and even complete roof collapses, leading to expensive repairs or replacements.
Melting snow and ice, combined with heavy rainfall, can lead to flooding, causing severe water damage to properties. Policyholders often face high costs to cover flood-related damages.
Winter storms can disrupt power lines, causing extended blackouts. This, in turn, can lead to damage from frozen or burst pipes, food spoilage, and discomfort for policyholders.
Winter storms are notorious for causing vehicle accidents due to slippery roads and reduced visibility. These accidents can lead to significant costs for insurers, including repair or replacement of vehicles, medical expenses, and liability claims.
From an insurer’s perspective, predicting the most expensive damage can help amplify mitigation efforts and protect total claims costs. Pay attention to these areas when it comes to mitigating claims during winter storms:
Property damage claims are the most significant cost for insurers during winter storms. These claims can encompass damage to homes, businesses, and other structures. Costs can include structural repairs, water damage restoration, and content replacements.
Commercial policyholders may experience business interruption due to winter storm-related issues such as power outages, property damage, and supply chain disruptions. Insurers often cover the costs of lost revenue and additional expenses incurred to maintain business operations.
Slip-and-fall accidents, auto accidents, and other incidents related to winter storms can lead to liability claims. Insurers may need to cover medical expenses, legal fees, and settlements.
Insurers often have to pay for emergency services, such as snow removal, tree removal, and temporary accommodations for displaced policyholders. These costs can add up quickly during severe winter storms.
When policyholders are forced to vacate their homes due to severe damage or power outages, insurers may be responsible for covering additional living expenses, such as temporary housing, food, and transportation.
To assist policyholders in safeguarding their properties and mitigate the most expensive damage during the winter months, insurers can adopt a multifaceted approach.
Winterization education helps show policyholders the gravity of winter storms. This may include advice on insulating pipes, sealing cracks, and preparing for potential power outages. Insurers can empower policyholders by encouraging them to conduct a winter storm checklist, helping them identify areas vulnerable to winter-related perils. By identifying such vulnerabilities, policyholders can protect their homes and businesses.
Insurers should advocate for regular maintenance of property. This can include maintaining roofs, gutters, and heating systems on a routine basis. Timely maintenance not only ensures the longevity of these structures but also helps prevent damage that could lead to costly claims.
Insurers should also advise policyholders to consider comprehensive coverage options. This includes coverage for flood and business interruption, allowing policies to be tailored to each individual’s specific needs. This tailored approach can help policyholders minimize potential losses, ensuring that they are adequately protected in the event of a winter storm.
Insurers can play a pivotal role in emergency preparation. Maintaining open and transparent communication with policyholders before, during, and after winter storms helps reduce claims costs, the total volume of claims and helps strengthen the insurer-policyholder relationship.
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