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Storm Surge Policy Questions Swell in the Wake of Hurricane Irma

Posted by Duncan Ellis September 14, 2017

Hurricane Irma’s powerful arrival in Florida has led to significant damage from a combination of wind, flood, and storm surge. The life-threatening and property destroying storm surge was forecasted to be 10 to 15 feet, but as the storm dissipated over land1, so did the extreme storm surge forecasts. Nonetheless, Irma’s impacts on Florida and the greater South are a stiff reminder of the importance of understanding how your insurance policy will respond to all aspects of a natural disaster.

Wording Matters

The clearer your understanding of what your insurance policy says, the more prepared you will be for a catastrophic event claim. Nearly every major catastrophe brings questions around coverage in a property policy. You must understand whether storm surge is defined as windstorm or flood in your policy. For example, if your company has $100 million of windstorm coverage, how does your policy define “windstorm?” Does that definition include storm surge or is that part of your flood sublimit, which might be less than $100 million?

Surge Versus Tide

Storm surge is the rise in water level caused by hurricane winds and low pressure. However, when surge levels combine with natural tide levels, storm surge becomes storm tide2. If storm surge hits a coastal area during its high tide, the results can be catastrophic. This increased threat of damage necessitates continual improvements in surge predictions.

Accurately modeling the timing of peak surge in relation to astronomical tides helps determine how much damage an area will experience from a hurricane or other coastal storm. Luckily a combination of factors, including weather systems and a weakening eyewall, decreased the magnitude of Irma’s storm surge.

Document, Document, Document

A related policy coverage area is the difference between damage caused by storm surge versus surface water from heavy rainfall and rainfall entering buildings through damage caused to the exterior. This can be challenging, requiring research and visual evidence to determine factors such as the level of storm surge, level of flood or surface waters, and rainfall amounts.

Once water has receded, take pictures of waterlines using smartphones, cameras, or drones if needed and record all damage to fully document the loss. You may want to supplement this with available NOAA vertical imagery or satellite imagery for a more complete view of the impacts to your site. When rebuilding efforts resume, document the work being done and the exact location where the work was performed. These steps will help facilitate the claims process with your insurer.

In the wake of Irma, be sure to carefully assess the damage, work closely with your insurance advisors, and review your coverage limits and how deductibles are applied. These actions will not only ensure you have a clear understanding of how your policy treats hurricane loss issues, but recover more effectively from current or future storms.


1Source: https://www.nytimes.com/2017/09/11/us/storm-surge-irma-flooding.html?mcubz=1&_r=0

2 Source: http://www.weather.gov/mdl/stormsurge_about

Duncan Ellis

Duncan is a managing director resident in the New York office and is the leader of Marsh’s US Property Practice.