The Atlantic hurricane season is upon us, and after last year’s devastating storms, carriers and insureds alike are on alert about the potential impact that this season may bring. Last year was one of the most active storm seasons on record, with ten hurricanes, including major events like Harvey, Irma, and Maria.
As we prepare for this season, it’s important to look back on last year’s losses to uncover ways insurers can handle claims more effectively and accurately. Data plays a vital role in evaluating the 2017 hurricane losses, because it can provide key insights into claims processing.
Assessing loss causes with weather data
Analyzing data from claims reported to ISO ClaimSearch® for Hurricane Harvey in Texas and Louisiana provides some interesting insights when combined with weather analytics from the storm. Using Verisk Weather Solutions’ Respond™ hurricane product, we analyzed maximum wind gusts in specific claim locations through a geocoding process.
As the chart below shows, more than half of the claims from Harvey were wind‐related, and the fifth most common cause of loss was cracking/rupture, which is often associated with wind. The Houston metro area had the highest number of reported claims, with an estimated 10 percent of property owners filing for losses.
However, data analysis reveals that in the Houston metro area, the average wind gust was only 47 mph—not likely strong enough to cause property damage. While gusts that speed can cause wind‐driven rain, which is often categorized as a wind loss, another factor may have been in play.
The Houston area experienced some of the worst flooding of the hurricane, which could be the cause of many of the cracking/rupture claims and even some of the reported wind damage. This is important because, according to the Insurance Information Institute, only 15 percent of homes in the Houston area had flood insurance. Therefore, there’s the possibility that fraud was involved in some of these claims.
Higher claim rates near storm’s landfall
While the personal property claim, count was highest in Houston, it was not the metro area that experienced the highest personal property claim rate. The highest claim rates were experienced in more traditional locations for hurricane events, near the landfall location.
For Harvey, this included the Corpus Christi and Victoria metropolitan areas, which both experienced an estimated 35 percent of properties filing a personal property claim. Claim rates within smaller geographies did tend to be much higher in some locations, especially near the landfall location, where winds gusted to more than 100 mph.
Flooding causes most auto claims
Regarding personal auto claims, multiple loss types can often be involved in weather‐related claims. For Hurricane Harvey, approximately 39 percent of auto claims filed in Texas and Louisiana noted flood as the type of loss, and 15 percent resulted in a rental reimbursement.
Still other claims were likely to have included an element of flood but were categorized under more generic loss types such as “other auto” and “comprehensive,” which ranked second and third. Collisions were the fifth most frequent cause of loss, but many of these losses would have occurred in the absence of Harvey.
Bringing clarity to storm claims
As the new hurricane season approaches, it’s important for insurers to take advantage of all tools available to prepare for this year’s storms. Weather data is an effective tool to help allocate resources, validate claims, and improve policyholder experience during events such as hurricanes.
Verisk has solutions available for ISO ClaimSearch users, such as Benchmark™, which provides claim‐specific historical weather information, and Respond, which provides geospatial weather data to help claims units address to weather events.
For more information on how Verisk Weather Solutions’ tools can prepare you for hurricane season, contact Verisk Weather Solutions at send e‐mail to email@example.com.