The 2021 hurricane season is shaping up to be a rough one with no signs of slowing down. Hurricane Ida ripped through the Gulf states downing power lines and obliterating structures. It then made its way up the Atlantic, unleashing record-breaking rainfalls, flash floods, and tornados which also caused extensive damage. Catastrophe risk solutions company RMS® estimates onshore and offshore U.S. insured losses from Hurricane Ida in the Gulf of Mexico to be between $25 and $35 billion. This does not include wind and inland flooding losses in the Mid-Atlantic and Northeast.
As the season (June 1 through November 30) enters its peak, the National Oceanic and Atmospheric Administration (NOAA) updated its forecast from 15 to a total of 21 named storms. Leading hurricane forecasters AccuWeather and Weather.com agree that 2021 will experience higher-than-normal activity.
The severity of these and other disasters has exposed a harsh reality: We are not prepared for the extreme weather that is now becoming more frequent as a result of a warming planet. A report released by catastrophe modeling firm AIR Worldwide (AIR), in collaboration with the Brookings Institution and AXIS Capital Holdings, indicates that by 2050, climate change-related weather events will have a meaningful impact on future hurricane losses, increasing them by 20% or more and in some cases doubling them, even without any increase in the concentration of property exposure along the coast.1
People Keep Building on the Coast
In the meantime, the insurance industry is looking at how it can continue to sustain such huge payouts in the aftermath of increasingly devastating and frequent losses. Some insurers have even pulled out of high-risk areas such as hurricane-prone Florida. Despite these dire predictions, risks, and the insurance market exodus by some insurers, residents and businesses choose to continue to live, work, and build in coastal areas.
It’s important that those opting to live in coastal areas take measures to reduce their property risks. They also need to purchase insurance and the right type of coverage. How many times have we heard that a property owner doesn’t have flood insurance? Data firm CoreLogic Inc., for example, estimates just 50% of residents affected by Hurricane Ida have flood insurance.
Having the right coverage doesn’t only apply to existing buildings and structures but also to properties under construction and those undergoing remodeling.
New! Coastal Builder’s Risk Insurance Available at Distinguished
Distinguished Programs has recently launched a Coastal Builder’s Risk program for residential and light commercial properties under construction in the coastal areas of Delaware, Georgia, Maryland, North Carolina, New Jersey, South Carolina, and Virginia. Backed by an A-rated carrier, coverage is available for new construction, remodeler’s, and betterments-only projects. TIV limits up to $20 million are available. The program provides coverage for all risks and includes theft and vandalism insurance. There are several additional coverages available as well – from debris removal to pollutant clean-up and removal, sewer and drain back up, and others.
You can submit, quote, and bind coverage for our Coastal Builder’s Risk program online using our broker portal.