Insurance Blog

In case you missed the news, funding for the National Flood Insurance Program (NFIP) which was set to expire on September 30, 2009, has been extended once again by Congress until December 18, 2009. This is the latest in a series of temporary extensions for the program approved by the House and Senate as part of an appropriations bill for the Department of the Interior. An overhaul of the 41-year-old program is currently taking back seat to healthcare reform and other major legislation on Capitol Hill. Ever since Hurricane Katrina in 2005, there has been debate over how to improve the NFIP. Significant property damage caused by storm surge from Hurricane Ike in 2008, has fuelled that debate. Flooding related to hurricanes Katrina, Rita and Wilma in 2005 led to loss payments of $17.6 billion under the program. At the end of 2008, the NFIP had some 5.7 million policies […]

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Another reason to have a flood insurance policy. A report from the U.S. Geological Survey warns that rainstorms this year in the area hit by the recent Station Fire in Southern California have the potential to trigger mudflows. The USGS said conditions in many of the areas burned by the fire indicated high probabilities of producing large mud and debris flows that may impact neighborhoods at the base of the San Gabriel Mountains as well as areas in Big Tujunga Canyon, Pacoima Canyon, Arroyo Seco, West Fork of the San Gabriel River and Devils Canyon. USGS warned that some rainstorms could generate debris flows of up to 100,000 cubic yards of material – large enough to fill approximately a football field 60 feet deep with mud and rock. Standard homeowners, renters and business insurance policies do not cover flood, mudslide and mudflow damage. However, damage from a mudflow (a river […]

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Just a year since Hurricane Ike – the third most costly hurricane in U.S. history – hit coastal communities in Texas with a powerful storm surge, a new study by the Institute for Business and Home Safety (IBHS) says government minimum flood elevation requirements for Gulf Coast properties vulnerable to storm surge are woefully inadequate. Its report on property damage caused by Hurricane Ike finds that many properties are not built high enough to withstand storm surges. The IBHS study questions the current basis for elevating properties along the Gulf Coast and urges the National Flood Insurance Program (NFIP) to provide greater incentives for building well above the minimum elevations now in place. As well as providing flood insurance, the NFIP establishes base flood elevation (BFE) levels for properties. All but a handful of properties located closest to the coast on the Bolivar Peninsula, Texas and even built to the […]

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After a slow start to the Atlantic hurricane season, three named storms, including the first hurricane of the 2009 season are now in play. Hurricane Bill with maximum sustained winds of 75 mph was located about 1160 miles east of the Lesser Antilles early this morning. National Hurricane Center forecasters say Bill is moving quickly toward the west-northwest at 22 mph and that strengthening is forecast in the next day or so. Bill could become a major hurricane by Wednesday. Meanwhile, Tropical Storm Claudette (now a tropical depression) became the first storm to make U.S. landfall on the Florida Panhandle early this morning, though it was not expected to cause significant flooding or wind damage. Tropical Depression Ana was also moving through the northeastern Caribbean though forecasters said it was likely to dissipate later today. Check out I.I.I. hurricane facts and stats. Check out I.I.I. information on flood insurance.

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Legislation that would extend the National Flood Insurance Program (NFIP) through March 31, 2010, was introduced in the House late last week. The NFIP is currently set to expire September 30, 2009. Check out a July 10 online article at Insurance Journal for more on this story. At the end of 2008, the NFIP had some 5.7 million policies in force. The average premium for an annual flood insurance policy is around $542, yet a 2008 poll by the I.I.I. found that only 17 percent of Americans have a flood insurance policy. Check out I.I.I. facts and stats on flood insurance.

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The majority of fatalities in the New Orleans metropolitan area following Hurricane Katrina in 2005 were caused by the direct physical impacts of flooding, according to a new study in the journal Risk Analysis published by the Society for Risk Analysis. The study findings are reported in a May 18 online article at Insurance Journal. “Loss of Life Caused by the Flooding of New Orleans After Hurricane Katrina: Analysis of the Relationship Between Flood Characteristics and Mortality” found that the overall mortality among the exposed population for the event was approximately 1 percent which is similar to findings for historical flood events. Mortality rates were highest in areas near severe levee breaches and in areas with large water depths. The majority of the victims were elderly with nearly 60 percent of fatalities over 65 years old, according to the study co-authors from the University of Delft in the Netherlands and […]

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With just over two weeks to go before the start of the 2009 Atlantic hurricane season, the National Hurricane Center (NHC) has confirmed it has removed storm surge risk from the Saffir-Simpson scale that ranks a storm based on its wind speed (see our recent April 1 posting). The NHC said the move is to help reduce public confusion about the impacts associated with the various hurricane categories as well as to provide a more scientifically defensible scale. Hopefully, it will also help homeowners understand why they need to buy a flood insurance policy from the National Flood Insurance Program (NFIP). A separate probabilistic storm surge product is available on the NHC Web site showing where storm surge is likely when there is a hurricane watch or hurricane warning in effect for any portion of the Gulf or Atlantic coasts. Aimed primarily at emergency managers, the Tropical Cyclone Storm Surge […]

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A growing number of insurers are providing low cost insurance to individuals in developing countries. For example just last week Munich Re announced a pilot project with Indonesian insurer Asuransi Wahana Tata and GTZ, the German government’s international development agency, to offer flood insurance coverage to low-income households in Jakarta. Instead of a lengthy policy document, the insured receives a simple protection card that guarantees a one-time payment in the event of a flood. Munich Re notes that with just 3 percent of low-income individuals currently having access to insurance products in the world’s 100 poorest countries, the microinsurance segment is a growing market. Microinsurance products tend to be much less costly than traditional products and thus extend protection to a much wider market. Check out I.I.I. facts & stats on microinsurance. 

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Countdown to the official start of the 2009 Atlantic hurricane season is underway. We’re now just 27 days away, but as there’s a 30-day waiting period before a flood insurance policy takes effect, no time like the present to stress the importance of buying flood insurance. The National Flood Insurance Program (NFIP) Web site has a clock counting down the hours, minutes and seconds to the start of hurricane season. As the NFIP says: “Hurricane season is flood season.” The I.I.I.’s 2008 Insurance Pulse found that only 17 percent of Americans have a flood insurance policy. Check out further I.I.I. facts & stats on flood insurance. 

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Storm surge warning and forecast is one of the many topics up for discussion at next week’s National Hurricane Conference in Austin, Texas. Ahead of this year’s hurricane season and following the impact of Hurricane Ike along the Texas coast last September, this is an important debate. Over at Weather Underground, Dr. Jeff Masters’ Wunderblog reports that the National Hurricane Center (NHC) is considering removing any mention of storm surge from the Saffir-Simpson Hurricane scale (wind speed is the determining factor in the current scale, though flooding is included as well). The change is a step towards separate storm surge warnings which the NHC is apparently considering. Hurricane Ike may have reignited the debate, but storm surge has long presented the greatest threat to loss of life in a hurricane to say nothing of potential property damage. 
An NHC report notes that storm surge losses in the hundreds of thousands of […]

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