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AIR: U.S. Winter Storms Could Hit Insurers With Up to $1.4 Billion in Losses

Source: AIR Worldwide


Posted on 08 Feb 2011

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AIR Worldwide estimates that insured losses to residential, commercial and industrial properties and their contents, and to automobiles from the winter storm that struck the U.S. on February 1–February 2, 2011, are between $790 million and $1.4 billion.

The winter storm—one of the largest since the 1950s—affected nearly 100 million people across 30 states. The storm cut a swath across Texas to Canada, dropping more than a foot and half of snow in some regions and bringing high winds, sub-zero wind chill temperatures, freezing rain and ice. Twenty fatalities have now been linked to the storm.

As is common of these storms that occur in the winter months, a large mass of very cold air followed in behind the storm’s front. The storm was able to form when cold Arctic air pushed south from Canada while moist air streamed north from the Gulf of the Mexico. Aside from the sheer size of the storm, the strength of the high pressure system behind this storm was also noteworthy. Pressure readings in Montana at the height of the blizzard were well above 1050 mb, the type of high pressure only seen once every 20 years or so in the U.S. This high pressure, coupled with the low pressure of the cyclone, led to the overall intensity of the storm.

A number of seasonal snow accumulation records were broken. In the Northeast, officials reported a new record in Newark, N.J., which now has 62 inches of snow, compared with the seasonal average of 25 inches. In New York City, 56 inches of snow have fallen on Central Park, compared with an average of 22 inches.

States of emergency were declared in Illinois, Indiana, Missouri and Oklahoma and the National Guard was called out to help rescue stranded motorists. The storm also prompted more than 30 auto plants and facilities across the Midwest to temporarily shut down production on Wednesday.

Many power plants were disrupted by the severe weather, and record electricity demand overwhelmed the system, resulting in widespread blackouts. Oklahoma has been declared a federal disaster area. Along with Illinois, these two states were the hardest hit.

In Chicago, wind gusts reached 67 mph along the lakefront, and the icy conditions brought road travel to a halt across the city. At least 900 vehicles were stranded on Lake Shore Drive, some for as long as 12 hours, and the storm shut down Chicago’s O Hare airport and suspended local train service. Heavy snow and high winds damaged a panel of the Wrigley Field roof and caused the roof of a historic church to collapse on Chicago’s west side. Local officials have reported at least six other buildings have been damaged from the effects of the storm.

In Oklahoma, heavy snow caved in the roof of a building on the Hard Rock Hotel and Casino complex in Tulsa. A section of a boat dock at the Tera Miranda Marina Resort collapsed due to significant snow accumulations on its roof, destroying four boats. The Oklahoma Highway Patrol reported more than 80 storm-related crashes on roadways.

With the accumulation of sleet, rain, and freezing rain, many roofs have been unable to bear the additional rain-saturated snow. The roof of a dairy barn in Schuylerville, NY, collapsed under the weight of snow from the storm. Collapses were reported in Middletown, CT, where the third floor of an apartment building failed. In and around Boston, MA, there have been over 70 reports of roof collapses— mostly flat-roofed commercial structures—and more buildings have been identified as being at risk.

While cleanup from the storm is underway, drifting is likely to continue to occur as a result of high winds, and there is still a potential for additional roof collapses. This is particularly true for light metal, long-span roofs (such as on hangars or warehouses). Engineered structures must conform to high load tolerances and damage to these structures is therefore expected to be minimal. But the roofs of marginally engineered structures can collapse under large accumulations of snow, particularly if their roofs have not been well-maintained.

Using the latest available data on the meteorological parameters and storm track of the winter storm together with the AIR Winter storm model for the U.S., AIR Worldwide estimates that insured losses to residential, commercial and industrial properties and contents, as well as to automobiles, are between USD 790 million and USD 1.4 billion.


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