A Maryland based group recently studied the effects of a hurricane hitting the Northeast and found the results would be economically devastating. Using only a category 3 hurricane in their analysis (Gustav and Katrina were both 4’s), the group found that such a storm could cause upwards of $130 billion in insured residential losses.
There’s “definitely the potential for very large events (in the Northeast), but they’re fairly infrequent,” said David Smith, senior vice president of EQECAT, a risk management company in Oakland, Calif.
Some 250 insurance industry professionals, academics and others attended a Willis Research Network summit on Category 3 hurricanes in the Northeast at Princeton University on Thursday. And they heard talks on hurricane and climate science and hurricane, storm surge and flood risks in the Northeast.
“This is a collective journey into a new era of science,” said Rowan Douglas, chairman of the Willis Research Network, the world’s largest partnership between academia and the insurance industry.
The events that unfolded in New Orleans and Galveston have brought new national attention to the danger of “improbable” hurricanes striking the US. While any national exposure to the effects of hurricane strikes is positive education for the masses on what Gulf Coast residents face yearly, it is important to also note that the losses were based on insured homes. The Gulf Coast still faces the problem of insurance lapses and ambiguity and it is important that homeowners reread and, possibly, recalculate the coverage they need before each hurricane season begins.