Disaster Safety Blog

Insured damage estimates emerging from Japan's disaster

Property damage from Japan's deadly earthquake and tsunami Friday could top $34 billion, according to initial estimates from AIR Worldwide. It was the most powerful earthquake to hit Japan since records began in the 19th century, and the fifth largest quake anywhere in the world in 110 years.

According to the United Nations Office for the Coordination of Humanitarian Affairs, some 1,200 buildings were destroyed. AIR has estimated the insured property losses at between $14.6 billion and $34 billion.

Comparisons are being drawn between Friday's quake and the 6.8 magnitude earthquake that hit the Japanese city of Kobe in January 1995. Some 6,500 people died in that disaster, which caused $122 billion in property damage.

The risk of earthquake in the United States is high in many regions. Find solutions to help protect your property with help from the Insurance Institute for Business & Home Safety at www.DisasterSafety.org/earthquake.

Earthquake and tsunami warning serve as reminders of risk

The devastating earthquake and ensuing tsunami that have hit Japan are a grim reminder that the U.S. mainland is also susceptible to quakes, according to the Insurance Information Network of California. Regions across the Pacific Rim, including California, remain on tsunami watch this morning.

“The potential cost of earthquakes is growing because of development in seismically active areas and the vulnerability of older buildings which may not have been built or upgraded to current building codes”
.Despite the state’s exposure to seismic risk, few Californians purchase earthquake insurance. Less than 12 percent of the state’s homeowners are estimated to have purchased quake policies, according to IINC.

“The potential cost of earthquakes is growing because of development in seismically active areas and the vulnerability of older buildings which may not have been built or upgraded to current building codes,” said IINC Executive Director Candysse Miller.

Earthquakes are not covered under standard U.S. homeowners or business insurance policies. Earthquake insurance is a supplemental policy to your home or business insurance. In California, homeowners can also secure coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization.

Flood damage from a tsunami also would typically be covered under a flood insurance policy rather than a standard homeowner insurance policy. Flood policies are available from the federal government’s National Flood Insurance Program (NFIP) and some private insurance companies, and can generally be purchased from the same agent or broker who provides your homeowners or renters insurance.

Since 1900, earthquakes have occurred in 39 states and have caused damage in all 50. Just last week, a series of minor quakes rocked the state of Arkansas. There has not been a major quake on the U.S. mainland, however, since the 6.7-magnitude Northridge earthquake in 1994.

The Northridge quake and the 1989 6.9-magnitude Loma Prieta quake were the two most costly earthquakes in U.S. history, as defined by insured losses. In 2008 dollars, Northridge caused an estimated $19 billion to $29 billion in insured losses while the Loma Prieta quake resulted in insured losses totaling a little over $12 billion.

For more information, please visit www.iinc.org. IINC is also on Twitter at http://www.twitter.com/iinc and on Facebook at http://companies.to/iinc.

Things to know before you go

Whether you're going on vacation for spring break, travel extensively for business or pleasure, have rental property that is unoccupied, or share time between two homes, there are things you can and should do before closing up your house for any real length of time, according to the Insurance Institute for Business & Home Safety.

Adjust Thermostat - One of the easiest things to do, but something easily forgotten, is adjusting the thermostat.

    * In colder climates, don't turn the thermostat off. Instead, lower it to a temperature that's warm enough to keep pipes from freezing but low enough that you are not spending money to heat an empty home. (No lower than 55 degrees.)
    * In warmer climates, high temperatures and humidity can damage furniture or other home contents. In this case, set your air conditioner to 85 degrees.

Protect Plumbing - Both plastic (PVC) and copper pipes can burst. Pipes, water heaters and other appliances can leak, or in freezing weather, pipes can freeze and burst, which can cause major damage in a home left unattended.

    * If you are leaving for an extended period of time, the best protection is to have the water shut off and the water lines drained.
          o Seek the advice of a professional plumber, who can shut off the valve at the water meter and send water outdoors and away from the house or into a basement drain. Once this has been done, the plumber should flush all toilets and drain the showerhead pipe.
          o Shut off the gas to the water heater (or the gas company can do this for you), or turn the temperature control to a "vacation" setting. If your house has a water softener, shut off its supply line.
    * If you choose to leave the water service turned on or will be away only a short while:
          o Make sure all pipes are insulated, especially in a garage or basement next to an outside wall or in crawl spaces and the attic. These exposed pipes are most susceptible to freezing.
          o Heat tape can also be used to wrap pipes. Wrap the tape or cables around water pipes, plug in the cord and the heating element will warm the pipes to prevent freezing. Closely follow all manufacturers' installation and operation instructions.
          o Turn off the water supply to individual fixtures like your washing machine, icemaker, toilets and sinks.
            Flooding often occurs when hoses are worn or ruptured, or there is a leak at the connection.
          o Don't leave appliances (dishwasher, washing machine or dryer) running when you leave, and check to make sure toilets aren't running. As an extra precaution, unplug your toaster, coffee maker, microwave oven, computer and television.
          o Make sure the sump pump is working, especially in late winter or early spring when melting snow or heavy rain increases the risk of basement flooding.

Plan for High Wind - If you're going to be away during a season that brings high wind, protect your property:

          o Trim dead limbs from trees and shrubbery and store outdoor furniture and other objects that could become damaging missiles if picked up by high wind.
          o Close and lock all doors, windows, skylights and vents to keep out wind and wind-driven rain.

Make Your House or Business Look Occupied - An empty, unsecured property can be a tempting target for thieves and vandals. 

    * Put interior and exterior lights on timers and/or motion sensors. Set the timers on staggered hours to turn lights on and off at different times.
    * Make sure tapered deadbolt locks all installed and in use on entry doors. The taper makes it almost impossible to use a wrench or other tool to twist the lock open.
    * Suspend mail service and newspaper delivery.
    * Install a monitored security system. (Insurers often provide discounts for devices that make a home safer, so consider the financial benefit.)
    * Inform the local police department that your house will be empty.

Wild weather puts properties at increased risk of damage

Weather across the U.S. is a case of extremes right now and threats to properties remain high. Take control of your risk, regardless of what threats you may be facing.

In the west and parts of the south and east, including Florida and Texas, drought conditions and windy weather have elevated the threat of wildfires. While in parts of the Midwest and southeast, residents are dealing with swollen rivers and flooded communities. Communities along the east coast are once again digging out from a snowstorm. Another storm is expected to hit the east coast later this week.

Find resources to protect your property from flooding, freezing weather, wildfire and other natural hazards at DisasterSafety.org, where you can enter your ZIP Code and get a personalized list of risks that face the areas where you live and work.

Building code update would require stronger enforcement in Memphis

An update to the commercial building code in Memphis, Tenn., which is considered among the cities at highest risk of damage from an earthquake along the New Madrid Seismic Zone, is expected to take effect this spring, pending final approval by city and county officials, according to the Commercial Appeal. The newspaper reports "the code will make buildings not just safer, but better, more serviceable."

According to the report, the new rules will require more inspections to ensure the code is being met. The existing code lacks enforcement requirements.

The new seismic codes emphasize creating a continuous load path from the roof to the foundation with the intent of increasing the building's ability to do more than just allow people to escape prior to a collapse, according to the newspaper.

The newspaper also reports along with the code update, there also is now an increased focus on encouraging non-structural mitigation, such as securing bookshelves, hanging fixtures and appliances, to prevent items from falling on people. Falling objects are the major source of damage due to earthquakes in the Midwest, according to the Central U.S. Earthquake Consortium (CUSEC). Both of these factors will allow a busienss to re-open quickly with little or no damage after an earthquake.

Structural and non-structural mitigation, along with a push for strong building codes and enforcement in the Midwest, were the focus of an earthquake outreach initiative conducted by IBHS, CUSEC and the Federal Emergency Management Agency earlier this month in five states, including Tennessee.

The newspaper describes the new Tennessee building code classifications in four ways:

Collapse prevention. It's like the crumple zone of a car. The auto may be totaled, but you can walk away from a crash.

Life safety. Better secures nonstructural elements of a building, such as light fixtures and bookcases that could fall on people. The building might still be unusable or require massive renovation, but its occupants were able to get out. This is the level the updated code is targeting most buildings, Paullus said.

Immediate occupancy. Building withstands a quake so well that it's repairable with a few months of work.

Essential structures. These are buildings everyone will depend on for recovery and order should a quake hit. They include police and fire stations, hospital operating rooms and military installations. These structures are so resistant, a quake may cause people inside to fall, but they can get up and go back to work.

For more information on protecting businesses and homes from earthquake damage through structural and non-structural mitigation projects, download a free copy of the IBHS guide "Earthquake Risk Around the U.S. - How to Protect Your Property."

Superstorm would lead to $300 billion in losses in California, scientists say

This week marks the 17th anniversary of the Northridge earthquake in California, but a group of scientists with the U.S. Geological Survey are focusing on a new project that has nothing to do with temblors.

Leading the project is prominent scientist Lucy Jones, who is best known for her work with earthquakes. This time Jones and her team are working on the threat posed by a theoretical Pacific-spawned superstorm, which Jones predicts could do much more damage in California than a major earthquake on the San Andreas Fault. The team is developing a scenario based on analysis of past events.

The scenario, basically is akin to two of the biggest storm cycles of the past half-century occurring back to back, according to the USGS. It includes 40 days of rain dropping up to 10 feet of water, high winds, landslides and flooding. Property damage estimates show losses possibly reaching $300 billion.

The event is not unprecedented. About 150 years ago, over a few weeks in the winter of 1861-62, enough rain fell to inundate a stretch of the Central Valley 300 miles long and 20 miles wide, from north of Sacramento south to Bakersfield, near the eastern desert, according to USGS Director Marcia K. McNutt.

The storms lasted 45 days, creating lakes in parts of the Mojave Desert and, according to a survey account, “turning the Sacramento Valley into an inland sea, forcing the state capital to be moved from Sacramento to San Francisco for a time, and requiring Gov. Leland Stanford to take a rowboat to his inauguration.”

Then, in 1938, heavy rainfall and flooding inundated Los Angeles and prompted the construction of the Hansen Dam and Sepulveda Dam to control the L.A. River and other major waterways.

Whatever natural or man-made risks threaten your home or business, find ways to reduce the risk of property damage with help from the Institute for Business & Home Safety (IBHS). Visit www.DisasterSafety.org.

New report makes recommendations for responding to Midwest floods

The National Weather Service has released its findings from an assessment conducted after the catastrophic flooding in May 2010 in Nashville, Tenn., and surrounding areas. 

A total of 26 people died in the region – 11 of those in Nashville, where property damage exceeded $2 billion, according to the report.

Shortly after the flood, NOAA’s National Weather Service sent a 10-person team to Nashville to examine the agency’s service to the community before and during the flood. The team spent seven days in the field interviewing flood victims, first responders, local business owners, the media and local officials. Their goal was to identify best practices and determine if the National Weather Service could have done anything differently for a better outcome.

“The team found that personnel in every agency involved in the flood were making all efforts to maintain operations and provide emergency support services to the community,” said Jane Hollingsworth, a Reno, Nevada weather forecast office meteorologist leading the assessment team. “Their capability was pushed to the limit due to unprecedented rainfall and record flooding. The magnitude of the rain and flood impacts was unimaginable and to some degree beyond the current state of science to predict.”

The team’s report includes a timeline of events leading up to and during the flood, a summary of their field research, facts about National Weather Service preparation, and actions and operations before and during the flood. The team identified four key findings and recommendations, among 13 in total, which are available in the report.

Below are the team’s four key findings and recommendations, as outlined in the report:

Finding: At critical times during the flood, insufficient coordination and communication between the National Weather Service and the Army Corps of Engineers undermined the flood forecast for the Cumberland River at Nashville. It was symptomatic of a lack of understanding of each other’s operational procedures, forecast processes and critical data needs.

Recommendation: The National Weather Service should take the lead to engage partners in regular interactions and exercises. Results of this effort should be a clear understanding of operating needs and procedures of each agency during routine and extreme weather events, creating quality long-term relationships and ensuring open and timely communications.

Finding: Despite good coordination and increased staffing in advance of the flooding, the forecast office in Nashville and the Ohio River Forecast Center needed additional staff augmentation to manage operations more proactively and maintain a high level of situational awareness as the severity of the flood threat increased.

Recommendation: Weather Service field offices should employ proven pre-event staffing models during high-impact weather. Staffing should include an event coordinator.

Finding: Many people did not respond to flood warnings, either because the warnings were not activated over the Emergency Alert System or because they were not specific enough to cause listeners to believe the flooding would impact their roads, homes and businesses. Those interviewed in the flood-impacted neighborhoods said they could not relate forecast stages on the Cumberland River to the threat at their homes, and all perceived that they had no warning.

Recommendation: Develop high resolution flood maps for Nashville and other highly populated and flood prone areas. Do this through the Integrated Water Resources Science and Services Consortium, a broad multi-agency initiative NOAA is leading to streamline water resource information, management and forecasting. There is an urgent local need for flood maps to help people identify their personal risk. The team recommends that development of the Integrated Water Resources Science and Services Consortium be expedited.

Jack Hayes, PhD, director of the National Weather Service, said that local offices have addressed the team’s key recommendations in the eight months since the flood. “The assessment team’s deliberative review is of great value, but we didn’t wait for the final report to make improvements to better serve the citizens of Nashville and the rest of America,” he said.

Among these improvements are:

Better coordination and communications with key partners such as the Army Corps of Engineers;

Re-emphasized procedures for local offices to ensure that forecast desks are sufficiently augmented during significant weather;

Enhanced NWS flood forecast training program locally; and,

Making changes to better communicate risk with stronger wording in NWS warnings and by working with the community to develop flood maps for Nashville.

Disasters and losses reached new highs in 2010, new report reveals

Natural disasters worldwide cost insurers more in property losses in 2010, according to a new report.

The new analysis by Munich Re, a member of the Institute for Business & Home Safety (IBHS), reveals insurers paid $37 billion in claims, which exceeded the 10-year average of $35 billion. This pay out was also considerably higher than the $22 billion of losses in 2009.

The losses were fueled by the 950 natural catastrophes that occurred in 2010, which made the year one of the worst in the 30 years since record keeping began, and exceeded the annual average of 785 natural catastrophic events by 21 percent.

The greatest losses of life and property were the result of earthquakes in Haiti, Chile and Central China; a heat wave in Russia, and floods in Pakistan. Even though the fatalities were highest in Haiti, the insured losses were greatest in Chile with $30 billion in damage because most Haitian properties were not insured.

According to the report, global insurers had high levels of earthquake exposure in Chile because of the lower risks associated with the modern building codes that were adopted and enforced after other earthquakes in that country's history. These codes resulted in lower fatalities and reduced property damage overall.

In Pakistan, rainfall from monsoons between July and September resulted in $9.5 billion in insured damage.

The 2010 hurricane season spared the United States, despite having the highest number of storms recorded in the last 100 years. There were a total of 19 tropical cyclones during the year, making it the third highest in recorded history. Overall, the season was a quiet one for insurers. Still, the unusually high amount of tropical activity has insurers watching for what's next.

In a release, Munich Re’s Reinsurance CEO Torsten Jeworrek said, “2010 showed the major risks we have to cope with. There were a number of severe earthquakes. The hurricane season was also eventful – it was just fortunate that the tracks of most of the storms remained over the open sea. But things could have turned out very differently. The severe earthquakes and the hurricane season with so many storms demonstrate once again that there must be no slackening of our efforts to analyse these risks in detail and provide the necessary insurance covers at adequate prices. These prices calculated by the insurance industry make it possible to assess the economic consequences of these otherwise difficult-to-evaluate risks.”

Find effective ways to reduce the risk of your home or business being damaged by a natural disaster and maintenance information at www.DisasterSafety.org.

Recovery begins in California, other states brace for more rough weather

Californians are getting a reprieve today after devastating rainstorms that spawned flash floods and mudslides in the southern part of the state Wednesday, but northern California and surrounding states are still bracing for more rain and snow.

The National Weather Service reports flood watches and warnings remain in effect in western Arizona, southern Nevada and southwestern Utah until early Friday morning. Mudslides remain a threat because of the rain-soaked ground.

An additional one to two inches of rain, with more in some areas, were expected through Friday morning as the system moved toward the Rockies, the National Weather Service said. Snowfall in some mountain areas topped 13 feet, while rain levels also reached new heights. Crestline, Calif., has received 26 inches of rain since Friday, while Santa Barbara received 14 inches and Lake Arrowhead got 12 inches.

As many as 40 homes in the San Bernardino County community of Highland were damaged by mud and water after two small rivers in the foothill town overflowed, according to the California Department of Forestry.

Officials in Littlefield, Ariz., say at least five vacant homes have been swept away by flooding in the northwestern part of the state since a powerful storm system arrived and more are in danger.

Insurers are busy responding to property damage claims, the Claims Journal reports. State Farm Fire and Casualty Company and Farmers Insurance, both members of the Instititue for Business & Home Safety (IBHS), reported receiving a combined total of more than 3,000 claims Wednesday.

The IBHS Water Damage Recovery Guide can help home and business owners during the recovery process. Other IBHS recovery resources include "You Can Go Home Again" and "Getting Back to Business." All of the resources are free at www.DisasterSafety.org.

Natural disasters cost reinsurers $20 billion in 2010, report says

Earthquakes in Chile and New Zealand topped the list of costliest disasters for reinsurers in 2010, according to a new report.

The new report by Guy Carpenter & Company, an affiliate member of the Institute for Business & Home Safety, found the reinsurance industry paid $8 billion in losses associated with the Chilean earthquake, while the New Zealand earthquake carried a price tag of $4 billion in insured damage.

Of the eight natural catastrophes that individually caused insured losses of more than $1 billion, five were related to severe weather and storms in the United States, Australia and Europe, for a total loss of $7.9 billion, according to the report. The Deepwater Horizon oil rig explosion in the Gulf of Mexico was the only man-made event to result in insured losses of $1 billion or more in 2010 at approximately $3.5 billion.

Guy Carpenter also reports that reinsurance losses in the United States generally matched those of 2009, totalling $11.2 billion in the first nine months of 2010. This was a decline from the $25.2 billion paid by reinsurers in 2008, due mostly to losses from Hurricanes Gustav and Ike.

Limiting exposures to natural disasters such as hail, high winds, hurricanes, wind-driven water and wildfire is the goal of the new IBHS Research Center, of which Guy Carpenter is a founding member. Learn more about this unique, world-class facility.