Another hurricane season is winding down and so far it appears that we’ve been lucky again. About a month ago, Hurricane Earl was forecast to blow through my coastal Massachusetts town. Like my neighbors up and down the heavily populated Atlantic coast, I prepared for Labor Day Weekend by stocking up on bottled water and “D” batteries, moving outdoor furniture inside, and filling the gas tanks in the cars and propane grill. In the days approaching the storm, a steady stream of trailered boats moved from harbor moorings to points inland.
Regulators also got ready for the coming storm. President Obama and East Coast governors declared States of Emergency that mobilized FEMA activity and shelters were made ready. Consumer advisories were issued up and down the East Coast. Maryland issued a reminder that any carrier seeking to implement a weather-related moratorium on writing new business must have previously filed implementation protocol. New Jersey reminded carriers of the need to activate their Disaster Response Preparation Plan in order to all marshal all appropriate resources to secure operations and provide timely assistance to insureds. Also in Earl’s projected path, Rhode Island provided guidance on emergency adjuster licensing . Like my last-minute shopping, these steps were intended to assist with the storm’s immediate aftermath.
Last-minute sandbags and plywood won’t save a house unless it is solidly built to stand up to the elements. Likewise, regulators, coastal business and home owners, and property insurers understand that the real foundation of comprehensive coastal risk management must be built well in advance of hurricane season. Underwriting guidelines that reflect compliant and careful coastal risk selection; mitigation guidance based on updated building codes; catastrophe models; disaster recovery plans; filed and approved rates and policies (including applicable hurricane deductible provisions and mandated flood insurance coverage disclosures), and reinsurance must all be in place before the hurricane-force winds start blowing.
As we recently passed the 5th anniversary of Hurricane Katrina, we were reminded of a major hurricane’s devastating cost potential in human lives, and property and environmental damage. Earl was no Katrina. As it approached Nantucket, it weakened into a heavy rainstorm and the East Coast was largely spared damaging winds and tides – but, understanding the risk and careful preparation is everything.
Editor’s Recommendation: Stay on top of emergency and catastrophe related requirements easily with NILS INsource .
