Near-record snowfall and prolonged extreme cold throughout many parts of the United States have resulted in insured losses from winter storms of more than $1.5 billion thus far, according to the Insurance Information Institute (the “III”).
The estimated $1.5 billion figure covers events occurring between January 1 and February 21, 2014 with more than 175,000 claims paid to policyholders, according to PCS, a division of Verisk Analytics. The III explained that insured losses include roof collapses, downed tree limbs and power lines, burst pipes from freezing, and auto accidents.
Many companies also have sustained business interruption and supply chain losses due to severe travel and transportation delays and business closings. And winter does not officially end until March 19.
“Severe winter weather, including snow, sleet, freezing rain, extreme cold and ice damage, accounted for 7.1 percent of all insured catastrophe losses between 1993 and 2012, placing it third behind hurricanes and tropical storms (40 percent) and tornadoes (36 percent) as the costliest natural disasters,” said Dr. Robert Hartwig, the president of the III and an economist. “While most winter storm losses occur in northern and mountainous regions of the United States, this spate of severe cold has also affected millions of home and business owners in the south, many of whom were unprepared for such extreme conditions.”
From an insurance point of view, just how serious is winter, historically? To provide some perspective, here are some winter-weather statistics:
- Winter storms caused $2 billion in insured losses in 2013, up dramatically from $38 million in 2012, according to reports from Munich Re.
- From 1993 to 2012 winter storms resulted in about $28 billion in insured catastrophe losses (in 2012 dollars), or $1.4 billion per year on average, according to PCS.
“Three of the four most costly years ever for insured losses from winter storms and damage occurred in the 1990s, led by the 'Storm of the Century' in 1993,” said Dr. Hartwig. Also known as the Great Blizzard of 1993, it affected 24 U.S. states and Canada, causing more than $3.2 billion (in 2013 dollars) and 270 fatalities. Areas as far south as central Alabama and Georgia received six to eight inches of snow and Birmingham, Alabama, received up to 12 inches, with isolated reports of 16 inches, according to the National Oceanic and Atmospheric Administration. Even the Florida Panhandle reported up to four inches of snow with hurricane-force wind gusts.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].