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The Importance of Flood Insurance, Other Coverages Underscored in Aftermath of 2017 Catastrophe Losses

HurricaneThe trifecta of hurricanes that made landfall in 2017 from Harvey to Irma and Maria, along with other natural catastrophes, such as severe flooding in Southeast Asia and the earthquake in Mexico is estimated to cost the insurance industry $135 billion. Overall losses, which also include uninsured losses, are estimated at $330 billion, the second-highest figure ever recorded for natural disasters, according to a recent catastrophe review by Munich Re, parent company of Roanoke Trade.

While the insurance industry is stepping up to help businesses and residents recover from their devastating losses, the fact remains that many unfortunately go without the proper coverage or are underinsured. This is never more evident, for example, in the aftermath of Hurricane Harvey, which hit the Houston area as a Category 4 storm in August. Only one in six homeowners in Houston’s Harris County has insurance coverage for flooding. In addition, the floods triggered by Harvey, explains Munich Re, mainly affected areas far from any body of water. In fact, a report from data provider CoreLogic says 52% of the properties in Houston that are at a high or moderate risk of flooding from Hurricane Harvey and its resulting rains are not in federally designated flood zones. This means the homes and businesses in those areas may not have Flood insurance, as it’s not a requirement for buildings outside of “special flood hazard area” zones.

In addition to many businesses coming up short when it comes to carrying Flood insurance, loss of income as result of property damage can also be an issue if the right policy is not in place. It’s important for all businesses to look at their exposures from natural disasters, particularly in light of recent severe weather patterns that are extending beyond typical flood-prone areas. The NFIP provides commercial Flood insurance up to $500,000 for structures and $500,000 for content. There are also private insurers that provide higher limits, which will be necessary for businesses with high property values, as well as Excess Flood insurance. Business Interruption insurance is available to reimburse you for loss of income as a result of total or partial suspension of your operations during a period of interruption due to property damage. It’s important to discuss how your specific Business Interruption policy is written, including the waiting period involved before coverage kicks in and how loss of income is determined.

The need for Flood insurance and other key coverages for businesses is more dire because devastating storms are hitting the U.S. with increasing frequency. Roanoke Trade specializes in insuring logistics service providers, including transportation companies, freight forwarders, warehouse operations and others, and can help you secure comprehensive insurance protection to safeguard your property and assets in the event of a devastating loss. We can assist you with your Property, Business Interruption, Flood, and Marine Cargo insurance needs. To speak to a Roanoke specialist about your insurance protection, please contact us at 1.800.ROANOKE (800.762.6653).

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