Wind Background
NAMED STORM BACKGROUND
In 1992, Hurricane Andrew caused $15.5 billion insured losses, the most expensive storm ever for insurers, with claims costing nearly four times as much as the previous most costly storm, Hurricane Hugo in 1989. It soon became apparent through computer-based models of storms and residential development patterns that business and homeowners insurers were far more vulnerable to huge weather-related losses than they had thought. Some of the largest insurers found it difficult to arrange for the reinsurance (insurance for insurance companies) coverage they needed to protect their bottom line because reinsurers were unwilling to assume so much risk. To get coverage from reinsurers, they had to agree to greatly reduce their potential maximum losses from severe wind and hailstorms by requiring their policyholders to bear a greater share of the cost. This was accomplished by switching over to percentage deductibles that not only increase the deductible amount across the board but force business and home owners to take a higher financial burden.
NAMED STORM DATA AND HISTORY
| Category | Wind speeds | Pressures | Storm surge | Damage |
| 1 | 74-95 mph | Greater than 980 mb | 4-5 ft. | Light |
| 2 | 96-110 mph | 965-979 mb | 6-8 ft. | Moderate |
| 3 | 111-130 mph | 945-964 mb | 9-12 ft. | Extensive |
| 4 | 131-155 mph | 920-944 mb | 13-18 ft. | Extreme |
| 5 | More than 155 mph | Less than 920 mb | Greater than 18ft. | Catastrophic |
| Source: U.S.Department of Commerce, National Oceanic and Atmospheric Administration, National Hurricane Center. | ||||
| 1998 | 1999 | 2002 | 2003 | 2004 | 2005 | |
| Frequency | 2 | 5 | 1 | 2 | 5 | 6 |
| Claims | 729,450 | 695,850 | 133,700 | 527,800 | 2,259,150 | 3,315,550 |
| Personal (2) | 72.8% | 73.9% | 83.8% | 82.3% | 73.6% | 70.0% |
| Commercial (2) | 15.7% | 17.2% | 3.0% | 4.1% | 13.4% | 9.3% |
| Vehicles | 11.5% | 9.0% | 13.2% | 13.5% | 12.9% | 20.7% |
| Losses (3) ($millions) | $3,315 | $2,315 | $430 | $1,775 | $22,900 | $58,337 |
| Personal (2) | 34.9% | 39.4% | 66.5% | 74.9% | 65.7% | 49.8% |
| Commercial (2) | 59.8% | 55.6% | 26.7% | 14.0% | 29.6% | 44.7% |
| Vehicles | 5.4% | 5.0% | 6.7% | 11.1% | 4.6% | 5.5% |
| Average Claim Severity | ||||||
| Personal (2) | $2,176 | $1,773 | $2,554 | $3,061 | $9,049 | $12,515 |
| Commercial (2) | $17,331 | $10,769 | $28,750 | $11,376 | $22,337 | $84,953 |
| Vehicles | $2,124 | $1,856 | $1,638 | $2,755 | $3,626 | $4,698 |
| (1) ISO’s Property Claim Services Unit currently defines catastrophes as events causing at least $25 million in direct insured losses to property and affecting significant numbers of insurers and insureds. There were no catastrophic hurricanes in 2000, 2001, 2006 or 2007. Stated in dollars when occurred.(2) Property losses excluding vehicle losses.(3) Does not include flood damage covered by the federally administered National Flood Insurance Program.Source: ISO’s Property Claim Services Unit. | ||||||
| Rank | Date | Location | Hurricane | Dollars when occured | Estimated insured loss (1) in 2008 dollars (2) |
| 1 | Aug. 25-30, 2005 | AL, FL, GA, LA, MS, TN | Katrina | $41,100 | $45,309 |
| 2 | Aug. 24-26, 1992 | FL, LA | Andrew | 15,500 | 23,786 |
| 3 | Oct. 24, 2005 | FL | Wilma | 10,300 | 11,355 |
| 4 | Sep. 12-14, 2008 | AR, IL, IN, KY, LA, MO, OH, PA, TX | Ike | 10,655 (3) | 10,655 (3) |
| 5 | Aug. 13-14, 2004 | FL, NC, SC | Charley | 7,475 | 8,520 |
| 6 | Sep. 15-21, 2004 | AL, DE, FL, GA, LA, MD, MS, NJ, NY, NC, OH, PA, TN, VA, WV | Ivan | 7,110 | 8,104 |
| 7 | Sep. 17-22, 1989 | GA, NC, PR, SC, VA, U.S. Virgin Islands | Hugo | 4,195 | 7,284 |
| 8 | Sep. 20-26, 2005 | AL, AR, FL, LA, MS, TN, TX | Rita | 5,627 | 6,203 |
| 9 | Sep. 3-9, 2004 | FL, GA, NC, NY, SC | Frances | 4,595 | 5,237 |
| 10 | Sep. 15-29, 2004 | DE, FL, GA, MD, NJ, NY, NC, PA, PR, SC, VA | Jeanne | 3,655 | 4,166 |
| 11 | Sept. 21-28, 1998 | AL, FL, LA, MS, PR, U.S. Virgin Islands | Georges | 2,955 | 3,903 |
| 12 | Oct. 4, 1995 | FL, AL, GA, NC, SC, TN | Opal | 2,100 | 2,967 |
| 13 | Sep. 14-17, 1999 | NC, NJ, VA, FL, SC, PA, 10 other states | Floyd | 1,960 | 2,533 |
| 14 | Sep. 11, 1992 | Kaui and Oahu, HI | Iniki | 1,600 | 2,455 |
| 15 | Sep. 5, 1996 | NC, SC, VA, MD, WV, PA, OH | Fran | 1,600 | 2,196 |
| (1) Property coverage only. Does not include flood damage covered by the federally administered National Flood Insurance Program.(2) Adjusted to 2008 dollars by the Insurance Information Institute.(3) Estimated.Source: ISO’s Property Claim Services Unit; Insurance Information Institute. | |||||