Is Your Portfolio Prepared for the 2014 Hurricane Season?

This post is part of a series sponsored by CoreLogic.

After one of the quietest hurricane seasons in decades, The Weather Channel predicts a below-average 2014 Atlantic Hurricane season. The early outlook released March 24, 2014 calls for 11 named storms, including five hurricanes, two of which are predicted to attain major hurricane status (Category 3 or stronger on the Saffir-Simpson Hurricane Wind Scale¹). The 2014 Atlantic hurricane season will officially begin on June 1 and end on November 30, but it’s important to keep in mind that the formation of tropical cyclones is possible at any time. Is your portfolio prepared?

What Is Storm Surge?

With hurricanes comes storm surge—a complex phenomenon that occurs when water is pushed toward the shore through the force of powerful winds associated with cyclonic storms. As a precursor to the hurricane, the storm surge can begin rising a day before the storm makes landfall and can also affect areas that are not in the direct path of the hurricane. This is particularly true in the Gulf of Mexico, where the ocean depths tend to be shallower than along the Northeast coast of the Atlantic.

Due to the counterclockwise rotation and track of hurricanes that impact the U.S., in many cases the right side or right-front quadrant of the storm will drive the highest surge levels when a storm strikes the coast, and the on-shore winds help to push the surge water onto the land. If landfall occurs at high tide, storm-surge levels will often be increased due to the availability of a larger volume of water from the tidal action. Wave action, on top of the surge, can then further augment the flooding. Storm surge can push inland via rivers, creeks and canals and can cause extensive damage over large areas inland from the coast. An additional peril can happen when saltwater flooding overtops levees or topographical berms. The water is then left trapped behind the barrier and can cause additional damage due to the inability of that water to naturally drain from the area.

The speed at which a hurricane moves along its path can be highly variable, even for a single storm. The surge levels created by a fast moving storm are likely to be higher than for a slow storm, and the hydraulic impact created by these waves tends to be incredibly destructive because one cubic yard of sea water weighs approximately 1,728 pounds – nearly a ton!

Source: CoreLogic, 2014

The Value of Storm Surge Data

Storm-surge data can be highly useful for insurance providers and financial services companies by enhancing the understanding of potential exposure to water damage for homes that do not fall within the designated Federal Emergency Management Agency (FEMA) flood zones. Homeowners who live outside of the FEMA Special Hazard Flood Areas (SFHA), especially in the Northeast, would have little reason to carry flood insurance, given that they may not be aware of the risk storm surge poses to their properties. For that reason, fully understanding the number and value of homes at risk of sustaining storm-surge damage allows insurance providers to improve underwriting policies and procedures.

CoreLogic® produces an annual Storm Surge Report which examines homes exposed to potential hurricane-driven storm-surge damage along the Gulf and Atlantic coasts in the U.S. The report provides an in-depth analysis of the total number and estimated value of properties potentially at risk.

Storm surge can cause massive damage to structures in several ways that can result in total loss. While every storm is unique, CoreLogic analysis considers loss processes that would likely be involved in a storm-surge event. As the 2014 Atlantic Hurricane season is quickly approaching, we encourage you to be prepared and improve coastal risk management by incorporating storm surge data into your underwriting process.

Sources:
¹ The Weather Channel, 2014 Hurricane Season Outlook: Another Quiet Season Possible for Atlantic, 2014.

Topics Catastrophe Natural Disasters Flood Hurricane