Monday’s Post 11/21/11 - It has emerged that the first nine months of 2011 have seen federal government officials make at least 86 disaster declarations in the United States. Insurance industry pundits have predicted a further spike in this number by year-end. According to Robert Hartwig, who is the Insurance Information Institute (III) president, the last one and a half decades recorded a steady increase in disaster declarations by the US federal government. From 1953 to 2010, an annual average of 34 disaster declarations were made, but the declarations shot up significantly to 81 in 2010. This year could see the 1953 – 2010 average triple, III has predicted. Hartwig says this upward trend has resulted from the increasing number of disasters and the tendency of the federal government to make disaster declarations. Disaster declarations are made to ease financing of urgent rescue operations in times of major calamities, like tornadoes and hurricanes.
According to the insurance industry, disasters are events that result in property damage and loss amounting to at least $25 million, as well as affecting a substantial number of insurers and insureds. Government officials have qualified three more counties in New York for disaster recovery support after they were hit by the devastating effects of Tropical Storm Lee. At the end of last month, the Federal Emergency Management Agency (FEMA) also announced that some sections of Delaware were affected by flooding resulting from Hurricane Irene. Those affected by Irene are now eligible for disaster support. (III) estimates the damages caused by disastrous weather conditions, including floods and tornadoes, within the first half of this year to be $27 billion. The second half of 2011 has also been affected by catastrophes, including Hurricane Irene, and this estimate is expected to increase substantially by the end of the year.
Hartwig has also estimated the total payouts by the insurance providers originating from catastrophic claims to be $25 billion as of the third quarter of this year. III points out that 2011 ranks top as a costly year in terms of claim payouts. Hartwig says damage claims particularly by New Jersey homeowners, insured residents in other parts of the US and Georgia car insurance policyholders significantly increased the total claim value. Apart from III, other agencies have also estimated the quantitative value of damages caused by recent disastrous events. The National Oceanic and Atmospheric Administration (NOAA), for example, estimated that weather-related catastrophes resulted in damages in excess of $35 billion by September. While Hartwig and other pundits have estimated the damages caused by Irene to be $5 billion, some risk experts have put the figure at $6 billion.
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