Hurricane Debby privately insured loss estimate peaks near $1.4 billion in the U.S.
KCC flash estimate breaks down damage by wind, storm surge and inland flooding.
Privately insured loss from Hurricane Debby is estimated to reach nearly $1.4 billion in the U.S., according to data compiled by Karen Clark & Company (KCC).
KCC said wind accounted for roughly $845 million of the overall estimate, while storm surge and inland flooding made up $130 million and $440 million of the total, respectively.
The estimate includes the privately insured damage to residential, commercial, and industrial properties and automobiles, as well as business interruption. It does not include boats, offshore properties or NFIP losses.
Meteorological highlights from the estimate include:
- Hurricane Debby made two landfalls — first on Aug. 5, as a Category 1 hurricane with 80-mph winds in Florida’s Big Bend region, and then again on Aug. 8, as a tropical storm with 50-mph winds in South Carolina.
- The storm brought significant rain to the eastern U.S. The highest rainfall total from the storm was 18.16 inches near Parrish, Florida, with totals upwards of 14 inches in Georgia and the Carolinas.
- An upper-level ridge over the western U.S. created an environment with weak upper-level winds, which caused Debby to move slowly over the southeastern U.S. The lack of steering currents contributed to the erratic track shape off the coast of South Carolina.
- Hurricane Debby was the third hurricane in the past ten years to make landfall in Florida’s infrequently impacted Big Bend region, joining Hermine (2016) and Idalia (2023).
In an interview with PropertyCasualty360.com, Peter McMurtrie, a partner in West Monroe’s insurance vertical, said a three-headed monster of extreme weather, hyperinflation and social inflation is threatening the insurance industry.
“Together, these three mighty factors are causing carriers to adjust their pricing strategies, reduce or non-renew parts of their portfolios, and in extreme cases, exit certain markets,” he said. “Insurance carriers set prices based on the anticipated cost of future claims. To determine these costs, they analyze a range of factors to predict both the likelihood of a loss and its potential expense.”
With weather events like hurricanes and floods becoming more frequent due to climate change, the Federal Emergency Management Agency (FEMA) recently announced new construction guidelines for taxpayer funded projects in floodplains.
“Historically, the primary weather concern for insurance carriers was hurricane activity affecting the coastal states along the Gulf and Eastern Seaboard,” McMurtrie said. “Now, however, severe convective activities such as hail, tornadoes, and straight-line winds have increased in both frequency and severity throughout the Midwest and Central Plains.”
“Additionally,” he added, “phenomena like derechos (severe straight-line wind events) and polar vortices (extreme temperature drops) have become significant concerns for insurers due to the substantial losses they cause.”
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