According to the National Oceanic and Atmospheric Administration, the United States as thus far endured a total of 12 natural disasters causing at least $1 billion in damage each in 2016. Included in that number are four major flooding events and eight severe storms. By comparison, from 1980 through 2000, the average annual number of billion-dollar natural disasters, as measured using CPI-adjusted figures, was merely 3.7.
NOAA’s numbers indicate that we have entered an era in which costly weather-related disasters are troublingly commonplace. While 2016 has been a devastating year for such events, it is hardly an outlier. In 2015, we saw 10 billion-dollar disasters; in 2011, NOAA recorded 16. All told, from 2001 through the present, the average number of such disasters per year jumped to 7.7.
The increasing frequency of large-scale weather-related disasters is hardly a surprise. See the federal government’s 2014 National Climate Assessment, which predicted this increase in dire terms. Insurers and their commercial clients, not to mention government agencies at all levels, will be forced to cope — through increased premiums for insurance lines, risk-mitigation measures, improved infrastructure, and disaster preparedness.
In particular, commercial insurance clients in Maryland and elsewhere along the eastern seaboard should make sure they are adequately insured against potential damage caused by storms like Hurricane Matthew. If they have not already, clients may want to review their flood and property insurance policies in light of changing climate conditions.
If you would like to discuss these issues, I am happy to provide my thoughts as to the best ways to make sure that clients are protected through significant weather events.