Winter Storms Capping Active Catastrophe Year

Last weekend’s Nor’Easter that blanketed the Eastern Seaboard with record snowfall is a potent reminder to insurers that an already active year of catastrophes is far from over.

The storm toppled trees and caused extensive power line damage throughout Connecticut, Massachusetts, New Jersey and New York. Emily Paterson, associate catastrophe response manager at RMS, said power outages will continue into the weekend.

“The snowstorm caused widespread power outages, with approximately 4 million people across 5 states losing power,” Paterson said “Extensive tree and power line damage means that around 25 percent of the peak power outage is continuing through to today, with outages anticipated to carry on through the week, particularly in the Northeast.”

The Insurance Information Institute notes that snow and ice storms, including those that occur before the official arrival of winter, are the third-largest cause of U.S. catastrophe losses, behind only hurricanes and tornadoes, In total, winter storms resulted in about $25 billion in private-sector insurer claims payouts between 1990-2009 and totaled $2.6 billion in insured annual losses in 2010 alone.

“Standard homeowners and business insurance policies provide coverage for a wide range of snow- and ice-related disasters such as losses incurred due to burst pipes, wind damage and wind-driven rain, as well as damage caused by downed trees, limbs or other falling objects,” said I.I.I. VP Michael Barry. “Car accidents caused by slippery road conditions are also covered under standard auto insurance policies.”

 

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