Insurance, Nature, and Natural Disasters

 August 10, 2009

 Four years ago, in 2005, Hurricane Katrina devastated New Orleans , and recovery still is not complete. The Louisiana Insurance Commissioner is recommending that all residents of New Orleans obtain flood coverage, even if they live in supposedly flood proof areas. . . As of May 13, the National Interagency Fire Center identified a total of 146 active wildfires covering 5,540 acres. Tornado season began April first, and FEMA has declared seven tornado or storm related disaster areas since then. Early this year the Red River overflowed its banks and residents of North Dakota and Minnesota were valiantly sandbagging trying to save homes and towns. Even Mt. Reboubt became active this year, bringing volcanic ash into the coverage picture. All these events, whether or not they make the headlines, involve insurance policies. Hurricanes get the most attention because their arrival can be anticipated and predictions come out months ahead. However while there may be six or seven hurricanes in a year, there may be 1,000 tornadoes or 140,000 wildfires. So while hurricane season begins June 1, just a few weeks away, now is a good time to look at policy language and how it is applied when Mother Nature tosses a curve.