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Best practices for underwriting natural catastrophe risk

Headlines and insights about the potential impacts of climate change are increasing with alarming regularity, prompting insurers and homeowners alike to ask how to properly account for damages associated with weather events and other catastrophes.

A holistic understanding of the property you are insuring is a good starting point for measuring future natural catastrophe-influenced losses.

Geographic and weather-related risk are nimble risks to manage but taking into consideration the nuances of the property you’re insuring, keeping track of weather threats as they migrate due to dynamic weather patterns, and the efforts of homeowners and communities to promote resiliency can help you take charge of multifaceted risk factors.

  1. Double trouble: Understand individual properties’ risk profiles, as well as effective of local building code enforcement

A holistic understanding of the property you are insuring is a good starting point for measuring future natural catastrophe-influenced losses. By understanding a property's condition and replacement cost, you can support insurance-to-value and be better protected in the event of a total loss.

But there’s more: Verisk data shows that structures built to withstand natural disasters can help prevent extreme losses and even loss of life, and it is possible to predict which buildings will be resilient enough to stand up against bad weather. Leveraging building code enforcement data can help you uncover what communities are best prepared to withstand catastrophic weather events, and what areas can use more support.

  1. New landmarks: Utilize historical data to understand changing geographic footprints

An evolving climate often means that the epicenters of weather events are not quite the same as they were a decade ago.

For example, hail has traditionally impacted a niche of Midwestern states, called “hail alley.” Two East Coast states, Pennsylvania and Maryland, entered the top ten states impacted by the peril 2021 with properties affected by hail. In fact, Colorado was the only hail alley state to crack the top ten in 2021—at number ten. And, the movement of hail activity to more densely populated Eastern states resulted in a near ten-percent increase in the number of US properties affected by hail events.

As weather patterns continue to change, following the trajectory of their migration can help you stay ahead of what portion of your book may be at risk next

  1. Home is where the heart is: How are policyholders positively influencing property risk

Finally, policyholders and their communities are an increasing force for good in the face of weather damage events. Research from the NFPA’s Firewise USA® program—Verisk’s wildfire community mitigation partner—shows that participation in mitigation program can have actionable results on the risk profile of not just one structure, but neighboring structures as well. According to NFPA, sites that participated in the Sites of Excellence pilot program saw higher levels of engagement and interest in the Firewise program and wildfire mitigation efforts; in six of the seven sites, more than 80 percent of adjacent households achieved the goal of mitigation in the home ignition zone.

As homeowners and community programs alike work to promote resiliency throughout their communities, insurers can leverage this information to make accurate and productive underwriting decisions.

To learn more about weather and natural catastrophe risk, download the latest whitepaper.

Austin Grigsby

Austin Grigsby is Associate Vice President, Personal Property Solutions at Verisk. He can be reached at

Dale Thomure

Dale Thomure is the manager of ISO Community Mitigation at Verisk. You can contact Dale at

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