Courtesy of iii.org

Wind-caused property damage is covered under standard homeowners, renters and business insurance policies. Renters’ insurance covers a renter’s possessions; the landlord insures the structure.

Property damage to a home, a renter’s possessions, and a business—resulting from a flood—is generally covered under FEMA’s National Flood Insurance Program (NFIP) and through some private insurers.

Private-passenger vehicles damaged or destroyed by either wind or flooding are covered under the optional comprehensive portion of an auto insurance policy. Nearly 80 percent of U.S. drivers choose to purchase comprehensive coverage.

“Superstorm Sandy, which impacted the Northeast, including New Jersey and Long Island, was the deadliest and most destructive storm of the 2012 Atlantic hurricane season, causing billions of dollars in insured losses,” said Dr. Michel Leonard, CBE, Vice President and Senior Economist, Triple-I, who also gathered the content posted at the Triple-I’s Resilience Accelerator website. “Homeowners and business owners should use flood maps to better understand their current exposure which can help determine whether their insurance is adequate.”

Most people who live in flood-prone areas of the country lack flood insurance. The average take-up rate for flood insurance—meaning the percentage of property owners who purchase these policies—stood at 15 percent nationwide, a Triple-I survey found in 2018.  In Ocean County, NJ, for example, the take-up rate in 2018 was 17.8 percent, compared to Suffolk County, Long Island, where only 6.2 percent of properties have flood insurance coverage.

Tropical Storm Fay is the sixth named storm of 2020, marking the first time six tropical cyclones have formed in the Atlantic basin so early in the calendar year.  Dr. Phil Klotzbach, a Triple-I non-resident scholar, and his atmospheric science team at Colorado State University, released an updated forecast last month which called for “well above-average” tropical cyclone activity for the balance of 2020.

Courtesy of iii.org

Hurricanes and storm-related flooding are responsible for the bulk of damage from disasters in the United States, accounting for annual economic losses of about $54 billion, according to the Congressional Budget Office (CBO).

These losses have been on the rise, due, in large part, to increased coastal development. More, bigger homes, more valuables inside them, more cars and infrastructure – these all can contribute to bigger losses. The CBO estimates that a combination of private insurance for wind damage, federal flood insurance, and federal disaster assistance would cover about 50 percent of losses to the residential sector and 40 percent of  commercial sector losses.

Recent research illustrates the benefits provided by mangroves, barrier islands, and coral reefs – natural features that frequently fall victim to development – in terms of limiting storm damage. In many places, mangroves are the first line of defense, their aerial roots helping to reduce erosion and dissipate storm surge. A healthy coral reef can reduce up to 97 percent of a wave’s energy before it hits the shore. Reefs — especially those that have been weakened by pollution, disease, overfishing, and ocean acidification — can be damaged by severe storms, reducing the protection they offer for coastal communities.

In Florida, a recent study found, mangroves alone prevented $1.5 billion in direct flood damages and protected over half a million people during Hurricane Irma in 2017, reducing damages by nearly 25% in counties with mangroves. Another study found that mangroves actively prevent more than $65 billion in property damage and protect over 15 million people every year worldwide.

A separate study quantified the global flood-prevention benefits of coral reefs at $4.3 billion.

Such estimates invite debate, but even if these endangered systems provided a fraction of the loss prevention estimated, wouldn’t you think coastal communities and the insurance industry would be investing in protecting them?

Well, they’re beginning to.

The Mexican state of Quintana Roo has partnered with hotel owners, the Nature Conservancy, and the National Parks Commission to pilot a conservation strategy that involves coral reef insurance. The insurance component – a one-year parametric policy – pays out if wind speeds in excess of 100 knots hit a predefined area. Unlike traditional insurance, which pays for damage if it occurs, parametric insurance pays claims when specific conditions are met – regardless of whether damage is incurred. Without the need for claims adjustment, policyholders quickly get their benefit and can begin their recovery. In the case of the coral reef coverage, the swift payout will allow for quick damage assessments, debris removal, and initial repairs to be carried out.

Similar approaches could be applied to protecting mangroves, commercial fish stocks that can be harmed by overfishing or habitat loss, or other intrinsically valuable assets that are hard to insure with traditional approaches.

Courtesy of iii.org

Hurricanes and storm-related flooding are responsible for the bulk of damage from disasters in the United States, accounting for annual economic losses of about $54 billion, according to the Congressional Budget Office (CBO).

These losses have been on the rise, due, in large part, to increased coastal development. More, bigger homes, more valuables inside them, more cars and infrastructure – these all can contribute to bigger losses. The CBO estimates that a combination of private insurance for wind damage, federal flood insurance, and federal disaster assistance would cover about 50 percent of losses to the residential sector and 40 percent of  commercial sector losses.

Recent research illustrates the benefits provided by mangroves, barrier islands, and coral reefs – natural features that frequently fall victim to development – in terms of limiting storm damage. In many places, mangroves are the first line of defense, their aerial roots helping to reduce erosion and dissipate storm surge. A healthy coral reef can reduce up to 97 percent of a wave’s energy before it hits the shore. Reefs — especially those that have been weakened by pollution, disease, overfishing, and ocean acidification — can be damaged by severe storms, reducing the protection they offer for coastal communities.

In Florida, a recent study found, mangroves alone prevented $1.5 billion in direct flood damages and protected over half a million people during Hurricane Irma in 2017, reducing damages by nearly 25% in counties with mangroves. Another study found that mangroves actively prevent more than $65 billion in property damage and protect over 15 million people every year worldwide.

A separate study quantified the global flood-prevention benefits of coral reefs at $4.3 billion.

Such estimates invite debate, but even if these endangered systems provided a fraction of the loss prevention estimated, wouldn’t you think coastal communities and the insurance industry would be investing in protecting them?

Well, they’re beginning to.

The Mexican state of Quintana Roo has partnered with hotel owners, the Nature Conservancy, and the National Parks Commission to pilot a conservation strategy that involves coral reef insurance. The insurance component – a one-year parametric policy – pays out if wind speeds in excess of 100 knots hit a predefined area. Unlike traditional insurance, which pays for damage if it occurs, parametric insurance pays claims when specific conditions are met – regardless of whether damage is incurred. Without the need for claims adjustment, policyholders quickly get their benefit and can begin their recovery. In the case of the coral reef coverage, the swift payout will allow for quick damage assessments, debris removal, and initial repairs to be carried out.

Similar approaches could be applied to protecting mangroves, commercial fish stocks that can be harmed by overfishing or habitat loss, or other intrinsically valuable assets that are hard to insure with traditional approaches.

Courtesy of iii.org

Today marks one year when my car got flooded, I got stranded, and I learned a huge lesson: I call it my floodiversary.

We keep a small saltwater tank, and to keep the tank healthy, it needs regular water changes. Before the Fourth of July weekend I decided to swing by the local fish store and pick up 5 gallons of water to replenish the tank. That way I could get the chores out of the way in order to relax and enjoy the rest of the holiday weekend.

I got to the store in time and picked up a five-gallon industrial container. I put it in the back, put the hatch down and started the 30-minute trip home. About halfway there, I made a turn. That’s when the trouble started. The car began to lose power. Fortunately I was able to pull over. I tried to start the car. Nothing. A new car…why? Then it occurred to me: the %$@*& water. I went to the back, opened the hatch and sure enough, my trunk had about an inch of water gently sloshing back and forth. I started to try and scoop the water out with the bucket, but it was impossible.

I went back to the car, got in and left the door open and started to assess my options. It was sweltering–about 90 degrees; I was in the middle of nowhere and had spotty cell service. I let my family know where I was and tried to connect to my car’s emergency system. After many tries and fails, and even speaking to an engineer, it was clear the car was not going to start up again. So I waited for the tow truck and my husband, as I swatted mosquitoes and thought about cold drinks and air-conditioning.

The tow truck arrived from the dealership, but the guy was in a hurry. He refused to let me ride back with him, but it was a war of wills. I was determined not to be left on the side of the road, so I stalled by asking him questions until my husband pulled up. We both watched as the car was raised on the flatbed, with water streaming out the back. It was a holiday weekend, so the car would have to sit on the lot in the heat all weekend. My husband had brought a stack of towels, so we did what we could. We looked at each other. No more water in the car.

On the ride back home I called my insurer. They couldn’t do much over the weekend but would be back in touch after the holiday. The next week I got the call. After the deductible was met, the damage was all covered—about $4,500 all in. My insurance also covered the cost of a rental car. The adjuster assured me the car would be fine; it turns out the water had shorted out a panel located in the trunk of the car that connected to its “brain.” But after the ordeal, it was a relief to know the car would be ok and ready to drive after a few days. The adjustor had been pleasant and helpful. “I got to tell you,” he said, “I’ve seen flooding before. But I’ve never seen a car flooded from the inside.”

Courtesy of iii.org

How gap insurance works

When you buy or lease a new car or truck, the vehicle starts to depreciate in value the moment it leaves the car lot. In fact, most cars lose 20 percent of their value within a year. Standard auto insurance policies cover the depreciated value of a car—in other words, a standard policy pays the current market value of the vehicle at the time of a claim.

If, when you finance the purchase of a new car and put down only a small deposit, in the early years of the vehicle’s ownership the amount of the loan may exceed the market value of the vehicle itself.

In the event of an accident in which you’ve badly damaged or totaled your car, gap insurance covers the difference between what a vehicle is currently worth (which your standard insurance will pay) and the amount you actually owe on it.

When you might need gap insurance

It’s a good idea to consider buying gap insurance for your new car or truck purchase if you:

• Made less than a 20 percent down payment
• Financed for 60 months or longer
• Leased the vehicle (carrying gap insurance is generally required for a lease)
• Purchased a vehicle that depreciates faster than the average
• Rolled over negative equity from an old car loan into the new loan

Where you can get gap insurance

Your car dealer may offer to sell you gap insurance on your new vehicle. However, most car insurers also offer it, and they typically charge less than the dealer. On most auto insurance policies, including gap insurance with collision and comprehensive coverage adds only about $20 a year to the annual premium.