Last year was an expensive one for the insurance sector, as the U.S. was marred by a number of natural disasters. The impact of these catastrophes – which include tornadoes, hurricanes, earthquakes and wildfires – not only resulted in multi billion-dollar losses for the economy but also personal tragedies for many home and business owners across the country.
CoreLogic recently released its annual Natural Hazard Risk Summary and Analysis, which details the scope of damages and costs.
Hurricane Sandy was without a doubt the most costly event in 2012, as it destroyed countless homes and businesses and all but destroyed the Jersey Shore shoreline. The storm impacted roughly 5 million Americans, many of whom are still undergoing the claims process with their property insurance agencies.
"Hurricane Sandy was, without a doubt, the single most destructive natural hazard event of 2012, due to the combination of environmental elements that created what the National Oceanic and Atmospheric Association (NOAA) called a 'Frankenstorm,'" said Thomas Jeffery, senior hazard scientist for CoreLogic. "The unusually broad span of the storm's reach, its intersecting path with a nor'easter and its landfall at high tide led to disastrous levels of storm surge, pushing flood waters far overland and causing widespread destruction along the coast that could total as high as $50 billion."
Wildfires and tornadoes were frequent in 2012
In addition to the destruction wrought by Sandy, wildfires were the third most destructive on record in terms of total acres burned. Colorado's Waldo Canyon Fire destroyed 346 homes, while New Mexico’s Whitewater-Baldy Fire burned 297,000 acres. Last year's tornado season was also particularly active and many states that are not typically prone to this occurrence were impacted by rare twisters. In January 2012 alone, a record 79 tornadoes were reported in several areas nationwide.
Authors of the study say that more extreme weather occurrences are likely to continue in 2013, and urge homeowners, businesses and insurers to prepare for these catastrophes. To better prepare clients for what is to come, insurance marketing agencies should ensure their customers are educated on their policies and the type of coverage they may be lacking. For example, many victims of Hurricane Sandy were dismayed to learn that their standard homeowners insurance did not cover flooding, which requires a separate policy.
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