04:47 pm
June 25, 2017

The Big One

The Big One

Wind insurance losses could hit $150 billion in a worst-case scenario

By Martin Lenkowsky

Weather experts say it’s simply a matter of when, and not if. South Floridians someday will find themselves staring into the literal eye of a monster as a huge, potentially catastrophic hurricane makes landfall.

We’ve been fortunate the past 10 years. The last time a hurricane struck South Florida was October 2005, when Hurricane Wilma made landfall near Naples as a category 3 storm and churned east across the southern portion of the state, two days after ravaging Mexico’s Yucatan Peninsula.

Historically, South Florida is no stranger to major hurricanes like Wilma.

Hurricane Andrew brought 175 mph (category 5) winds ashore in Homestead in August 1992. The damage was catastrophic, but it could have been much worse: At one point Andrew was projected to hit near the Miami-Dade/Broward county line. Instead, it hit on the southern end of the metro area.

One worrisome scenario would be a repeat of the 1926 Great Miami Hurricane (category 4), which carved a path of destruction throughout Miami-Dade, Broward and Palm Beach counties resulting in at least 350 deaths and $105 million in damages. Many deaths occurred around Lake Okeechobee when the winds swept water over the dikes and into surrounding rural communities.

That storm’s path took the eye directly over Miami, resulting in massive structural damage and a 10- to 15-foot storm surge. It’s estimated if a similar storm struck South Florida today, we would incur at least $100 billion in damages.

Michael Lyons

Michael Lyons

 

Brian Zachry

Brian Zachry

A repeat of that hurricane would create $43 billion in insurance losses, not counting deductibles, says Florida International University professor Shahid Hamid, chair of the school’s Department of Finance. He leads the development and operation of the Florida Public Insurance Loss Model, which forecasts the insurance losses caused by hurricanes.

With deductibles subtracted, the cost to insurance companies would be reduced to $36 to $38 billion. “The total economic loss would be two to three times that,” Hamid says. “That would include damage to infrastructure.”

Experts say the most horrific scenario would be a major hurricane striking the coast of Miami-Dade County, turning north and then hugging the coastline of both Broward and Palm Beach counties. “That’s our worst nightmare,” Hamid says, “but the chance of that happening is low.”

Should that scenario come to fruition, insurance losses without deductibles could reach $150 billion. Hamid points out the insurance-loss models are based only on wind damage and don’t include losses from flooding. Flood insurance is obtained through the federal government.

0816 SFBW Magazine 23

The case for flood insurance

“Everyone living in South Florida should consider buying flood insurance, whether or not they’re required to have it,” says Erik Salna, associate director of FIU’s International Hurricane Research Center.

In the event of a hurricane, there would be two sources of flooding: coastal storm surges and torrential rainfall inland.

Severe wind and flood damage are a fact of life with any hurricane hitting land. However, the loss of life would be less today than in the past because of technology and an increasingly accurate forecasting ability, experts say.

“Storms don’t sneak up on us anymore,” Salna says. “Emergency management would have time to evacuate. They need two or three days’ lead time.”

Salna says getting some people to evacuate is never easy. “How many will evacuate?” he asks. “The bottom line is if you live in an evacuation zone, you should evacuate. End of story.”

New storm surge warnings

Inland waterways have been known to flood as well in major hurricanes, Salna says. Rivers can overrun their banks as the ocean’s storm surge flows into them. The biggest killer in a hurricane is the storm surge.

“Fifty percent of the lives we lose in a hurricane is due to the storm surge,” says Brian Zachry, a National Hurricane Center storm surge specialist. This season – for the first time – the NHC is issuing color-coded prediction maps to advise those in danger to evacuate. “If people can see on a map that they’re going to be underwater, they might heed the warnings,” Zachry says. “Our technology has gotten so much better, we can create these products.”

When storm surge forecast maps are drawn, Zachry says, they run between 500 and 1,000 different scenarios. “Every possibility is built into that,” he says. “Our new products not only show how high the water will get, but how far inland it will go.”

The 1926 hurricane caused a 10- to 15-foot surge, leading to massive flooding and structural damage. (For comparison, Hurricane Andrew created a 17-foot surge.) When it struck an unprepared South Florida, there were two phases to the death and destruction.

First, many lives were lost; people were trapped by the onslaught of water and wind when the eye passed, says Paul George, a noted South Florida historian and a history professor at Miami-Dade College. Then, because many Miami residents at the time were new to the area and had never experienced a hurricane before, many left the safety of their homes and ventured outside, unaware the dangerous second half of the storm was still to come.

“In 1926, we weren’t prepared,” he said. The region still wasn’t in 1928 when another hurricane made landfall in Palm Beach County and killed more than 2,500 people in and around Lake Okeechobee.

He points out even in the case of Hurricane Andrew, which hit six decades later, forecasters knew it was coming, but didn’t have a precise idea exactly where it was going to hit. “I think if we had a better idea, we would’ve evacuated more people,” George says.

If a hurricane approaches South Florida, the South Florida Water Management District immediately institutes measures to lessen the threat of inland flooding. “The first thing to do is to communicate with all drainage and flood control districts,” says SFWMD spokesman Randy Smith. “We would coordinate a pre-storm drawdown to handle a lot of runoff. The primary purpose of this agency is flood control.”

A drawdown refers to draining existing bodies of water to the ocean in order to lower the levels. “You can accomplish a lot of flood control with this system,” Smith says. However, no system is perfect. “You never can guarantee there won’t be flooding,” he says. “We still have very low-lying areas without a good system.”

Lowering the water levels will allow for some runoff from secondary systems, but some waterways can become clogged from uprooted trees and other storm debris. Overall, Smith expects the drainage systems will function adequately in the suburban areas. In the event of a storm surge, the district also can close coastal flood gates on some canals and rivers.

Paying the claims

In the aftermath of a damaging hurricane, countless insurance claims will be filed for property damage. Michael Lyons, CEO of Weston Insurance Company in Coral Gables, is optimistic the insurance industry will be able to honor its obligations. Weston Insurance is a member of the Florida Property & Casualty Association.

“I can’t speak for everyone else, but we can handle it,” Lyons says. He says insurance companies purchase billions of dollars in reinsurance – a shared-risk arrangement – from other companies around the world just in case the big one hits. “We buy a little more than $1.2 billion in reinsurance,” he says. “We try to buy the right amount. The risk gets spread around the world to people you don’t think would be involved with the hurricane risk in Florida.”

Lyons says the insurance industry looks at models of the 1926 hurricane with particular concern. “That was the worst,” he says. “The worst part of the storm, the top-right quadrant, went right across Miami Beach and downtown Miami. It was a high category-4 storm. Even back then that area had a high population density.”

84 comments

  • Hello there, just became alert to your blog through Google, and found that it is truly informative.
    I’m going to watch out for brussels. I will appreciate if you
    continue this in future. A lot of people will be benefited from your writing.
    Cheers!

    Reply
  • Hello very nice blog!! Guy .. Excellent .. Superb ..
    I will bookmark your site and take the feeds also?
    I’m satisfied to seek out so many helpful information right
    here in the submit, we’d like work out more techniques on this regard, thank you for sharing.
    . . . . .

    Reply
  • Whoa! This blog looks exactly like my old one! It’s
    on a completely different subject but it has pretty much the
    same layout and design. Outstanding choice of colors!

    Reply
  • Thanks for your marvelous posting! I actually enjoyed
    reading it, you happen to be a great author.I will ensure that I
    bookmark your blog and may come back someday. I want to encourage yourself to continue your great work,
    have a nice day!

    Reply
  • Excellent blog right here! Also your site lots up very fast!
    What web host are you using? Can I am getting your associate hyperlink in your host?
    I wish my site loaded up as quickly as yours lol

    Reply
  • Thanks for your marvelous posting! I quite enjoyed reading it, you could be a great author.
    I will make sure to bookmark your blog and will often come back very soon. I want to encourage you continue your great posts, have a nice evening!

    Reply
  • Have you ever considered creating an ebook or guest authoring on other blogs?
    I have a blog based upon on the same topics you discuss and would really like to have you share some stories/information. I know my audience would enjoy your work.

    If you are even remotely interested, feel free to send me an email.

    Reply
  • After looking at a handful of the blog posts on your web site, I seriously like your technique of writing a blog.
    I book marked it to my bookmark website list and will be checking back in the near future.

    Please check out my website too and let me know how you feel.

    Reply
  • Just wish to say your article is as astounding. The clarity
    to your submit is simply cool and that i can suppose you are knowledgeable on this subject.
    Well with your permission let me to seize your feed to stay updated
    with forthcoming post. Thank you a million and please carry on the enjoyable work.

    Reply
  • of course like your website but you need to check the spelling
    on several of your posts. Many of them are rife
    with spelling problems and I find it very
    bothersome to inform the truth on the other hand I’ll surely come back
    again.

    Reply
  • Hello there, I found your website by way of Google whilst looking for a related topic, your web site got here up, it seems great.
    I’ve bookmarked it in my google bookmarks.
    Hello there, simply become alert to your blog through Google, and found that it
    is truly informative. I am going to be careful for brussels.
    I’ll be grateful in the event you proceed this in future.
    Lots of people will be benefited out of your writing.
    Cheers!

    Reply
  • Fantastic goods from you, man. I have remember your stuff previous to and
    you’re simply extremely great. I actually like what you
    have received here, certainly like what you are stating and the best
    way through which you say it. You’re making it entertaining and
    you still take care of to stay it sensible. I cant wait to
    read far more from you. That is actually a wonderful
    site.

    Reply
  • After looking over a number of the blog articles on your
    website, I seriously appreciate your way of blogging.
    I saved it to my bookmark site list and will be checking back soon.
    Take a look at my web site as well and tell me what you think.

    Reply
  • We’re a gaggle of volunteers and starting a new scheme in our community.
    Your website provided us with valuable info to work on. You’ve performed a formidable
    activity and our whole neighborhood might be thankful to you.

    Reply
  • Have you ever considered creating an e-book or guest authoring on other sites?
    I have a blog based upon on the same subjects you discuss and
    would really like to have you share some stories/information. I know my readers would appreciate your work.
    If you are even remotely interested, feel free to shoot me an e mail.

    Reply
  • hey there and thank you for your info – I have certainly picked up something new from
    right here. I did however expertise several technical points using this web site, as I experienced to reload the website lots of times previous to I could get it to load properly.

    I had been wondering if your web host is OK?
    Not that I’m complaining, but sluggish loading instances times will sometimes
    affect your placement in google and could damage your
    high-quality score if ads and marketing with Adwords.
    Anyway I’m adding this RSS to my e-mail and can look out for much more of your respective intriguing content.

    Ensure that you update this again soon.

    Reply
  • Its like you learn my thoughts! You seem to grasp a lot
    about this, such as you wrote the book in it or something.
    I feel that you just can do with some percent to drive
    the message home a little bit, however other than that, that is great blog.
    A great read. I’ll certainly be back.

    Reply
  • Hey! Do you know if they make any plugins to protect against hackers?
    I’m kinda paranoid about losing everything I’ve worked hard on. Any suggestions?

    Reply
  • Good day! This post couldn’t be written any better! Reading this post reminds me of my old room mate!

    He always kept chatting about this. I will forward this write-up
    to him. Fairly certain he will have a good read. Thanks for sharing!

    Reply
  • Can I just say what a relief to discover a person that
    really knows what they are discussing on the net. You
    definitely know how to bring an issue to light and make it important.
    More people must read this and understand this
    side of your story. It’s surprising you aren’t
    more popular since you surely have the gift.

    Reply
  • Thank you for any other excellent post. The place else could
    anyone get that kind of info in such a perfect means of
    writing? I’ve a presentation next week, and
    I am on the search for such information.

    Reply
  • Good day! This is my first visit to your blog! We are a team of volunteers and starting a new project in a community in the same niche.

    Your blog provided us beneficial information to work on.
    You have done a outstanding job!

    Reply
  • Hi! I could have sworn I’ve been to this blog before but after checking through some of the post I realized it’s new to
    me. Nonetheless, I’m definitely delighted I found it and I’ll be bookmarking and checking
    back often!

    Reply
  • Thank you a lot for sharing this with all of us you really recognize what you’re speaking approximately!
    Bookmarked. Please additionally visit my site =).
    We will have a hyperlink change arrangement among us

    Reply
  • My relatives all the time say that I am wasting my time here at web, except I know I am getting know-how every day by reading thes fastidious articles or reviews.

    Reply
  • Thanks for your personal marvelous posting! I certainly enjoyed reading
    it, you are a great author. I will be sure to bookmark
    your blog and will often come back down the road.
    I want to encourage you continue your great job, have a nice day!

    Reply
  • I have been surfing online more than 4 hours today, yet I never found any interesting article like
    yours. It’s pretty worth enough for me. In my opinion, if all webmasters and bloggers made good content
    as you did, the web will be a lot more useful than ever before.

    Reply
  • Good day! This is my 1st comment here so I just wanted to give a quick shout out and tell you I really enjoy
    reading your posts. Can you recommend any other blogs/websites/forums
    that deal with the same subjects? Appreciate it!

    Reply
  • Having read this I thought it was really informative. I appreciate you taking the time and energy to put this article together.
    I once again find myself spending way too much time both
    reading and leaving comments. But so what,
    it was still worth it!

    Reply
  • I’m curious to find out what blog system you have been utilizing?

    I’m experiencing some small security problems with my latest
    site and I’d like to find something more risk-free.
    Do you have any suggestions?

    Reply
  • Undeniably believe that which you said. Your favorite reason appeared to be on the internet
    the easiest thing to be aware of. I say to you, I certainly get irked
    while people think about worries that they just do not
    know about. You managed to hit the nail upon the top and defined out the whole
    thing without having side-effects , people can take a signal.
    Will probably be back to get more. Thanks

    Reply
  • Hi, I do think this is an excellent blog.
    I stumbledupon it 😉 I will return once again since i have bookmarked it.
    Money and freedom is the best way to change,
    may you be rich and continue to guide other people.

    Reply
  • Thanks for another great post. The place else may just anybody get
    that kind of information in such a perfect means of writing?
    I’ve a presentation subsequent week, and I’m on the search for such information.

    Reply
  • Thank you for every other informative web site. Where else
    may just I am getting that kind of info written in such an ideal means?
    I have a project that I am just now running on, and I have been at the glance out for such
    information.

    Reply
  • you’re actually a excellent webmaster. The web
    site loading velocity is incredible. It kind of feels that you’re doing any distinctive trick.
    Also, The contents are masterwork. you’ve done a magnificent process in this matter!

    Reply
  • Hello fantastic blog! Does running a blog like
    this require a massive amount work? I have absolutely no expertise in computer programming but I had been hoping to start my own blog in the near future.

    Anyway, if you have any recommendations or tips for new blog owners please share.
    I understand this is off topic but I simply needed
    to ask. Cheers!

    Reply
  • hello there and thank you for your info – I have definitely picked up something new from
    right here. I did however expertise several technical issues using this site, as I experienced to reload the web site many times
    previous to I could get it to load correctly. I had been wondering if your hosting is OK?
    Not that I’m complaining, but slow loading instances times
    will sometimes affect your placement in google and can damage your high quality
    score if advertising and marketing with Adwords.
    Well I’m adding this RSS to my email and could look out for much more of your respective interesting content.

    Ensure that you update this again very soon.

    Reply
  • I am curious to find out what blog platform you are utilizing?

    I’m experiencing some minor security issues with my latest site and
    I would like to find something more safeguarded.
    Do you have any recommendations?

    Reply
  • After going over a number of the articles on your website, I really appreciate your
    way of writing a blog. I bookmarked it to my bookmark site list and will be
    checking back soon. Please visit my web site as well and let me know what you think.

    Reply
  • Appreciating the dedication you put into your blog and in depth information you provide.
    It’s awesome to come across a blog every once in a while that isn’t
    the same unwanted rehashed material. Excellent read!

    I’ve saved your site and I’m including your RSS feeds to
    my Google account.

    Reply
  • Fantastic beat ! I wish to apprentice while you
    amend your site, how could i subscribe for a blog site?
    The account helped me a acceptable deal. I had been tiny bit acquainted of this
    your broadcast provided bright clear concept

    Reply
  • hey there and thank you for your info – I have definitely picked up anything new from right here.

    I did however expertise some technical points using this web site,
    as I experienced to reload the web site a
    lot of times previous to I could get it to load properly.

    I had been wondering if your web hosting is OK? Not that I am complaining, but sluggish loading instances times will sometimes affect your placement in google and can damage
    your quality score if ads and marketing with Adwords.
    Anyway I’m adding this RSS to my e-mail and can look out for much more of your respective fascinating content.
    Ensure that you update this again very soon.

    Reply
  • I have been browsing online more than 3 hours today,
    yet I never found any interesting article like yours.

    It is pretty worth enough for me. In my view, if all web owners and bloggers made good content as you did, the net will be a
    lot more useful than ever before.

    Reply
  • I know this if off topic but I’m looking into starting my own blog and was wondering what all is needed
    to get setup? I’m assuming having a blog like yours would cost a
    pretty penny? I’m not very internet savvy so I’m not 100%
    positive. Any tips or advice would be greatly appreciated.
    Appreciate it

    Reply
  • I’m really enjoying the design and layout of your site.
    It’s a very easy on the eyes which makes it much more enjoyable for me
    to come here and visit more often. Did you hire out
    a developer to create your theme? Fantastic work!

    Reply
  • Greate post. Keep writing such kind of info on your blog.

    Im really impressed by your site.
    Hello there, You have done an incredible job. I will
    definitely digg it and individually suggest to
    my friends. I’m sure they will be benefited from this web site.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *