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

The Saffir/Simpson Classification System For Hurricanes
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.

 

Years with Catastrophic Hurricane Losses in the United States Since 1998 (1)
  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.
 
 
Top 15 Most Costly Hurricanes in the United States ($ millions)
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.