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August 29, 2007

HURRICANE DEAN AN OMEN?

Hurricane Season Is Far From Over

Hurricane Dean notwithstanding, windstorm activity has been light again this year … so far. Unfortunately, however, hurricane season runs through the end of November. We even have over a month to go to get through the peak of the season which ends on September 30.

Forecasters continue to predict greater than average hurricane activity not only for this year, but for the longer term. In fact one respected group, the Department of Atmospheric Science at Colorado State University, has published the following prediction for 2007 in the “Atlantic Basin”:

	Named Storms:	17
	Hurricanes:	9
	Hurricane Days:	40
	Intense Hurricanes:	5
	Intense Hurricane Days:	11

They put forth the following probabilities of at least one major hurricane (category 3,4 or 5) making landfall on each of the following coastal areas:

	US Coastline: 74% (average for last century is 52%)
	US East Coast 50% (average is 31%)
	Gulf Coast 49% (average is 30%)

Even other areas of the country are not immune from this kind of storm activity, with New England now in the sights of some forecasters. In fact New England does have a history: there have been six category 3 hurricanes in Massachusetts alone in the last century, with the last one in 1969. Hurricane patterns are cyclical, and the thought is that the pendulum has swung.
Risk management includes the following:

	1.	New building construction should certainly conform to local building codes, but in addition owners should look to the codes in other states like Florida and Louisiana which are in some ways far ahead with respect to wind-resistant construction
	2.	Building insurance values should be at least 100% of replacement cost, with consideration of a limit even higher to cover debris removal, spikes in construction costs following events, and changes in building codes
	3.	Careful attention should be paid to flood insurance, even in areas outside of FEMA’Äôs’ÄúSpecial Flood Hazard Areas.’Äù Reasons for this include:
	’Ä¢	FEMA pays 25% of their claims in zones other than special hazard areas
	’Ä¢	FEMA is in the process of remapping the entire country, but has not released the new zoning yet; thus many published flood zones are obsolete
	’Ä¢	Hurricanes are often slow moving and dump tremendous loads of precipitation, so that normally dry land not near any body of water is vulnerable; this month’Äôs extraordinary Midwest flooding is an illustration of this phenomenon
	4.	There are steps to take when a storm is imminent in your area; contact us for tips on this subject

 For more information, or to attend, contact Debora Wu, at DWu@LicataRisk.com

News & Reports Archives

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October 19, 2007 GLOBAL WARMING SYMPOSIUM

August 29, 2007 HURRICANE DEAN AN OMEN?

April 25, 2007 WHO'S LIABLE FOR PET FOOD CONTAMINATION-THE RISK OF PRODUCT LIABILITY

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Fall 2004 INSURANCE BROKER SUED BY NEW YORK ATTORNEY GENERAL

Summer 2004 UNDERSTANDING THE DYNAMICS OF THE INSURANCE MARKET

Winter 2004 WORLD TRADE CASE UNVEILS INNER WORKINGS OF INSURANCE BROKER

 Fall 2003 A RISK MANAGEMENT APPROACH CFOs (AND THEIR ACCOUNTANTS) CAN LOVE

Summer 2003 PRESERVING COVERAGE FOR INNOCENT INSUREDS

Spring 2003 LEAVING TERRORISM COVERAGE ON THE TABLE

Winter 2003 COMPUTER SECURITY IS NOT A BLACK HOLE

Fall 2002 "LET'S BE CAREFUL OUT THERE

Spring/Summer 2002 WHAT WARREN BUFFET KNOWS ABOUT INSURANCE COMPANY FINANCIALS

Spring 2002 OPPORTUNITIES ABOUND IN DEVELOPMENT OF CONTAMINATED PROPERTIES

Winter 2001 "YOU CAN'T PAY US THIS MONTH? WHAT DO YOU MEAN 'NEW DEVELOPMENTS?"

Fall 2001 WORLD TRADE TERRORISM -- REPERCUSSIONS FOR INSURANCE MARKET

Summer 2001 ENERGY AVAILABILITY: CURRENT REALITY OR FOND MEMORY?

Spring 2001 "HOLD THAT BALLOT UP TO THE LIGHT"