As part of National Catastrophe Week, the Insurance Information Institute released a comprehensive study on insurance issues as they relate to natural and man-made catastrophes. As restoration contractors’ business are linked directly to these events, we just wanted to share a few of the findings within the report.
(If you have the time, we recommend reading the report in its entirety. The report breaks down weather-related catastrophes and how they’re are trending for the future, recent developments, availability of insurance within coastal areas, developing federal programs, and a breakdown on the costs of certain catastrophes.)
Here are some of the top items we wanted to share:
1. Hurricane Sandy was the 3rd most expensive catastrophe ever (behind Hurricane Katrina and Hurricane Andrew). However, because of the populous area the storm hit, it is estimated that 15% of the US population was affected by the storm.
2. 2012 saw almost a twice as many hurricanes (10) as it does in a normal year (6).
3. Thunderstorms, including tornadoes, accounted for over 90% of all insured catastrophe losses in the first half of 2012.
4. Due to drought conditions in the Southwest, wildfires burned almost 9 million acres in 2012. Also, the risk of wildfires is expected to grow as temperatures continue to rise on a global level.
5. House members have introduced the “Homeowner Catastrophe Protection Act of 2013” in February. The legislation will actually provide tax incentive for homeowners and insurance companies that will allow them to better prepare for natural disasters.
For example, the bill would allow homeowners to establish a tax-exempt savings account where they could put money to pay for losses associated with federally declared natural disasters.
6. States are passing legislation that will require insurance companies to offer discounts to homeowners who strengthen their homes.
For restoration contractors, much of the information released by the study implies that work stemming from national catastrophes is only expected to grow as both natural and man-made catastrophes continue to grow in both size and scope.