First hurricane in 11 years set to leave many uninsured in the path of Hermine

First hurricane in 11 years set to leave many uninsured in the path of Hermine

First hurricane in 11 years set to leave many uninsured in the path of Hermine The first hurricane to hit the Southeast coast in more than a decade is bearing down on Florida’s Panhandle region, but a large number of homeowners are likely to be caught unaware – and uncovered – by the storm surge. 

Tropical Storm Hermine strengthened to hurricane level Thursday night and reached wind speeds of 74 to 95 miles per hour – typical for a Category 1 storm. The surge of ocean water is expected to be the source of most of the damage, which reached as high as nine feet above normal levels in some areas.

Areas as far as Georgia and South Carolina are also expected to be affected by heavy rain that could cause flash flooding Friday and through the weekend. 

While homes and businesses in Hermine’s path may sustain some wind damage, answerable by homeowners insurance, the bulk of losses are likely to come from storm surge in Western Florida, Andrew Higgins, technical manager of the Americas with Allianz Risk Consulting, told Insurance Business America. 

“When the high tides hit, it could range from one to nine feet depending on where you are,” Higgins said Thursday evening. “There is the expectation that there will be some flooding, and obviously right on the coast, the damage will be severe.”

Higgins said that while he was “fairly confident” commercial and industrial buildings have the proper insurance in place, homeowners may have let their flood coverage lapse in the past 11 years without a storm.

The uptake rate for National Flood Insurance Program policies is certainly down. In 2012, the state of Florida had 2,059,423 policies in force. Last year, that plummeted to 1,845,621 – a drop of more than 10%.

The good news is that the event may convince residents of the importance of the coverage, aiding agents in their conversations with customers. 

“Florida just hasn’t had a hurricane in many years, so the insurance industry has hit a little bit of wall and residents may have become a little lax in their concern for something like this,” said Higgins. “But hurricanes do hit – it’s just a matter of time.” 

In the meantime, agents should be prepared to field calls and claims in coming days as well as over the weekend. For those in Georgia and the Carolinas, they can aid their clients by identifying homes and facilities that may be in harm’s way. 

“Based on what we know about the facility, insurance professionals can work with clients to develop a hurricane pre-plan and do what we can physically to enable it to withstand strong winds,” said Higgins.