Wildfires

Dust storms

Floods

Crop damage

Summary

Introduction

 A drought is considered a deficiency in precipitation over an extended period of time, usually a season or more, which results in water shortages for some activity, group, or environmental sector. However this can be much more far reaching than it sounds: the Dust Bowl of the 1930s covered 100,000,000 acres and while it was centered on the panhandles of Texas and Oklahoma, it touched adjacent sections of New Mexico, Colorado, and Kansas; dust blizzards went as far as the east coast. Part of the issue in the 30s was not only the lack of precipitation but the plowing of virgin soil that displaced natural grasses that normally trapped soil and moisture, even in dry conditions. This unanchored soil turned to dust and formed huge storms known as black blizzards or black rollers. Roughly 3.5 million people moved out of the plains states between 1930 and 1940 due to this natural disaster.

 Another huge drought occurred between 1950-1956 through the Great Plains and Southwest. By the time the drought ended in 1957, 244 of Texas's 254 counties were declared federal disaster areas. In 1988, due to drought, 793,880 acres of Yellowstone National Park burned, causing the first complete closing of the park in its history. The drought that occurred between 1987 and 1989 was the costliest drought in American history, costing roughly $39 million. There have been other droughts sporadically and in various sizes from the 1960s through the 2010s. A national Drought Monitor is available at http://droughtmonitor.unl.edu/ that provides a graphic as to what states nationwide are experiencing what level of drought and other information.

 Current Conditions

 Washington state has just declared a statewide drought, and California is in the middle of an exceptional drought, the worst form of drought possible, and has implemented water restrictions, including a mandatory 25 percent reduction in water usage. Forty-six percent of the state is in an exceptional drought, and it is expected to worsen as the summer progresses. The drought has been going on for four years, and according to the American Geophysical Union, has produced the worst conditions in 1,200 years.

 California has had 3,897 fires so far this year compared to an average of 2, 552 fires. The fire north of San Francisco, the Rocky Fire, has claimed 85 square miles, destroyed 24 homes and threatens 6,300 more. The fire is fast moving and at times has covered 20,000 acres in five hours.

 All residents and several state agencies, including the State Water Board, are required to take steps to safeguard the state's potable water supplies. Usage over the past year has dropped by 9 percent, far below the 20 percent that was required in 2014. Indoor water use should be no more than fifty-five gallons per person per day. Water used over that amount is generally used for lawns and other ornamental landscaping.

 There are numerous prohibitions and restrictions, such as not using potable to wash sidewalks and driveways, not allowing runoff when irrigating with potable water, and not using hoses with no automatic shutoff nozzles to wash cars and other restrictions. Local property owners can be fined up to $500 per day for failing to implement the water restrictions and prohibitions. The water board is allowed to issue informational orders, conservation orders, or cease and desist orders to water suppliers for failure to meet their conservation standard. Water agencies that violate cease and desist orders can be fined a civil liability of up to $10,000 a day.

 Theft of water is an issue, and water has been stolen from the Sacramento-San Joaquin Delta; a number of homeowners were fined $1,500 each for taking water from a canal. Water has also been stolen from fire department tanks. Some counties are developing task forces to combat the theft of water, and the East Bay Municipal Utility District (EBMUD) has a new ordinance that allows them to levy fines against those stealing water or making unauthorized use of a public fire hydrant. Fines are $500 for the first offense and $1,000 for second violations.

 With water restrictions, the filling of swimming pools, especially for swim clubs, could become problematic. If clubs are not permitted to fill their pools and lose business income, would coverage exist? Drought itself is not listed as an exclusion, however there must be direct physical loss or damage to property at the premises to trigger coverage. What is the physical loss or damage at the swim club? They've lost their access to water, but that is not physical damage per se. It could fall under the utility services exclusion—failure of any utility service includes lack of sufficient capacity or reduction in supply. There is an endorsement to cover utility interruption—CP 15 45. The utility interruption must be caused by a covered cause of loss, and we're back to the beginning.

 An issue that has never arisen before is individuals flying drones into wildfire areas, preventing firefighting aircraft from doing their jobs. One county is offering a $75,000 reward in hopes of catching such individuals, and a state representative is proposing federal prison time for individuals who send drones over fires on federal land. Another county is offering a $25,000 reward. Drones impede firefighting by forcing aircraft to delay attempts to put out the fire; the aircraft must be grounded until the drone is out of the area. The San Bernadino County Commissioners stated that low flying tankers could suck the drones into the jet engines, causing the engines to fail and the planes to crash. This is particularly hazardous as many of these fires are so fast moving. A four-foot drone shut down operations over the Lake Fire, allowing it to burn an additional 3.5 square miles overnight.

Wildfires

Wildfire season begins June 1, and with the drought, predictions are that more than 1,000 mega wildfires are possible. A mega wildfire can destroy in excess of 10,000 acres. Because California is prone to wildfires, California law requires owners of property that adjoins mountainous areas, forest-covered lands, brush-covered lands, grass-covered lands, or lands covered with flammable material to maintain 100 feet of defensible space from each side and the front and rear of the structure, but not beyond the property line unless as required by state law or local ordinance, rule, or law. (West's Ann. Cal. Pub. Res. Code § 4291). This leads into underwriting requirements and restrictions; there are companies that have already stopped writing new policies in certain counties and the foothills area due to increased risk of fire. Fire is always a covered cause of loss, but first one must be able to obtain insurance and maintain the required defensible spaces. Failure to maintain defensible space could be a cause for nonrenewal, depending on state regulations.

 According to CAL FIRE, (http://www.readyforwildfire.org/defensible_space/) defensible space is broken down into two zones to create the 100 feet of space. The first zone extends thirty feet from the building, structures, and decks. Note that San Diego county requires fifty feet for zone one. All dead plants, grass, weeds, vegetation, leaves, and pine needles should be removed from not only the yard but the roof , rain gutters, and from around and under decks. Trees should be trimmed to at least ten feet away from the chimney, branches that overhang the roof should be removed, and trees should be trimmed to keep a minimum of ten feet from each other. A separation should be maintained between items that can catch fire such as patio furniture, wood piles, swing sets, trees, and shrubs. Wood piles should be moved into zone two. Flammable plants or shrubs near windows should be trimmed or ideally removed.

 Zone two extends seventy feet from zone one, giving a total of 100 feet of defensible space; remember however that certain towns or counties may have even stricter requirements. In zone two, grass must be kept mowed to no more than four inches high, horizontal spacing should be kept between shrubs and trees, vertical spacing needs to be maintained between grass, shrubs, and trees, and leaves, needles, twigs, bark, cones, and small branches must be removed, although they are allowed to a depth of three inches. Horizontal spacing is the clear space between trees and shrubs; there should be ten feet of clearance between trees on level ground, and twice the width of shrubs on level ground. For example, if a shrub is two feet wide, then there should be four feet of space between it and the next shrub. On sloped ground, the distances double, and on severe slopes, the distances triple. Vertical spacing requires six feet of spacing from the ground to the first branches of the tree. If a shrub is under a tree, then the space required between the top of the shrub and the bottom branches of the tree is at least three times the height of the shrub. If the shrub is two feet high, then six feet of space is required from the top of the shrub to the bottom of the first tree branch.

 The statute allows carriers that provide coverage for occupied dwellings or structures to require even more space if a fire expert, designated by the director, provides findings that indicate that more space is needed in order to significantly reduce the risk of transmission of heat or flame sufficient to ignite the structure, and there is no other feasible mitigation strategy.

 Dust Storms

 The dry ground makes dust storms and haboobs a very real hazard. "Haboob" is an Arabic name for dust storm and is often the result of a collapsing thunderstorm pushing air over dry areas and picking up dust and carrying it aloft. This is not a light amount of dust. Visibility is blocked, aircraft are grounded, and driving is impacted. Haboobs tend to be larger and more serious than regular dust storms. They can generate winds up to seventy miles per hour and last for three hours. During a haboob, visibility can drop to zero in less than a minute, seriously impacting traffic and causing accidents and chain reaction accidents involving numerous motorists. Haboobs also generate friction among the dust particles, which can lead to the buildup of electrical charges that can create lightning or discharge along power lines and transformers, causing loss of power and fires.

 Storms originating in Mexico have been known to travel as far as the Great Plains and southern Canada. Storms often occur in Arizona, New Mexico, and Texas. Storms can be as large as fifty miles wide and 10,000 feet high. Damages include typical damage from wind and sand. Wind damage is straightforward enough, however sand damage is another matter.

 The standard homeowners form provides coverage under debris removal for the removal of ash, dust, or particles from a volcanic eruption that causes direct loss to a building or property in a building; nothing is said about damage from dust or sand not caused by a volcano. Sand blowing at sixty miles per hour can certainly cause damage to siding and other property and contaminate any water in pools or hot tubs. While damage to personal property includes damage caused by windstorm or hail, damage to property inside a building caused by sand or dust is not covered unless the direct force of wind causes an opening in a roof or wall and the dust or sand enters through that opening. Since these storms can arise out of the blue, it is possible for the insured to leave his windows open and come home to a house full of dust and damaged property and no coverage for any of it.

 Another homeowners issue is that of matching; depending on how the winds blow, only part of the dwelling's siding could be damaged, bringing up the issue as to whether all the siding must be replaced to restore the insured to his preloss conditions or if only the damaged siding must be replaced, even if it does not quite match. It is a difficult issue as courts fall on both sides; however, if the insured had matching siding before, logic dictates that he should end up with matching siding again after a loss. See The Matching Game and Pre-Loss Conditions and Replacement Cost Insurance.

 The Salton Sea, the largest lake in California, is drying out and it could become catastrophic. The material from a dried lake bed is lighter and flies farther than ordinary soil, creating the potential for dust to be blown to Los Angeles, creating health problems for 650,000 people. Aside from aggravating asthma and other common breathing problems, Valley fever is a risk as well. Valley fever is a fungal infection with flu like symptoms caused by organisms found in the soil that can be stirred into the air by anything that disturbs the soil, such as dust storms. It can cause more serious effects and death in small numbers of people. Between 1998 and 2011, cases went from 2,000 to over 24,000, in large part due to the growing drought.

 This raises the potential for workers compensation claims for anyone who works outside, such as landscapers, road crews, construction workers, and amusement park staff. The Mayo Clinic recommends the wearing of masks, which employers should provide in order to avoid infections among outside workers and possible claims.

 Floods

 While it may seem bizarre to talk about floods in an article about droughts, it is entirely possible. Oklahoma went from 41.9 percent of the state being in a drought to 2.7 percent in the span of a week. With the ground parched, water is apt to run off and flood instead of soaking into the ground. A normal thunderstorm or amount or rain can lead to severe flooding on top of a drought. It is even worse when large amounts of rain fall, leading to severe flooding. Flood is never covered by standard property policies, and flood policies are needed. Mudslides and other earth movement is possible too and likewise is not covered.

 Water damage to vehicles however is another issue. A parked vehicle that is submerged by rising water is an other than collision claim, while the people who drive into standing or flowing water is a collision claim. It is a matter of the insured driving into, or colliding with the water, versus the water rising up around the vehicle, similar to the difference between driving into a tree and having a tree limb fall on the vehicle.

 Crop Damage

 Crops are some of the hardest hit areas where drought is concerned. The 2014 drought in California

Cost $1.5 billion, $1 billion of which was revenue loss alone. Five percent, or 428,000 acres, of irrigated cropland was out of production. Rain helps when it comes, but with crops, the damage is not immediately reversible as crops are growing plants, and rain can be too little too late in order for the crop to rebound. Crop insurance is its own specialty and insured through a federal program working with various carriers. See Federal Crop Insurance, http://www.cropinsuranceinamerica.org , and http://www.rma.usda.gov/ .

 Summary

 When insurance catastrophes are discussed, most people think first of hurricanes, floods, and tornadoes. Drought does not often make the list, although there are numerous insurance issues. From losses of potable water to wildfires, dust storms, floods, and crop damage, droughts have serious implications for many areas of insurance.