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An Insurance Retreat From Weather Disasters

After Hurricane Sandy roared across the Northeastern United States, many homeowners on Long Island—even those who escaped the most damage—lost their property insurance...
October 29, 2014

After Hurricane Sandy roared across the Northeastern United States, many homeowners on Long Island—even those who escaped the most damage—lost their property insurance. The same thing happened in coastal Virginia after Hurricane Katrina, which hit hundreds of miles away along the Gulf Coast. Today, from Florida to Delaware, property insurance near the water is becoming harder and harder to find.

Less than 33 percent of the $116 billion in worldwide losses associated with weather-related disasters in 2013 were covered by insurance, according to Swiss Re, with insurers covering 45 percent of the losses sustained by Hurricane Katrina in 2005. In a new report, sustainability group Ceres found that "over the past 30 years, annual losses from natural catastrophes have continued to increase while the insured portion has declined." Washington State Insurance Commissioner Mike Kriedler says, "I'm worried because insurers only stay in markets until they deem them not profitable."

Property and casualty insurers have a clearer picture of the huge potential costs they face. CoreLogic, which provides analysis on the property market, calculates that more than 6.5 million homes in the United States are at risk of storm surge damage. Their reconstruction value is $1.5 trillion, or about one-tenth of the annual output of the entire American economy.

A Retreat From Weather Disasters (New York Times 10/21/14)

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