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Eastern Atlantic region braces for another hurricane

Katia expected to be Category 3 storm in 4 days; Irene damage in the US estimated at $10 billion.

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Forecasters confirmed there is a possibility that Katia could become a major storm this weekend as it moves across the Atlantic. The US National Hurricane centre said it’s too early to tell if Katia will hit the states, but it is expected to pass north of the Caribbean with winds at 75mph.

If the storm does advance to a Category 3 or hit the Eastern Atlantic region in the US and Canada, the Insurance Bureau of Canada (IBC) recommends homeowners should lock their windows securely and, if possible, cover window glass with protective film to prevent shattering. If flooding is a possibility, move any valuables out of the basement. Outside, it is a good idea to remove all outdoor furniture, garbage cans and hanging or potted plants, and trim back trees and shrubs.

“Those in the path of the storm should also ensure they are prepared in case there is a power outage,” Erika Bennett, communications officer at IBC told Canadian Insurance Top Broker August 31. “Charge flashlight and radio batteries. Unlock doors that automatically operated, such as garage doors. Homeowners should also record the contact information for their insurance representative and keep it in a safe place. If they need to make a claim, knowing who to contact can make the process move along more quickly.”

Hurricane Irene Update

Meanwhile the US and parts of Canada are still dealing with the aftermath of Hurricane Irene, which killed at least 40 people in the US and left millions in North America without power.

Bennett told Canadian Insurance Top Broker that it’s too early to estimate damage in Canada at this point.

However, in the US EQECAT estimates Irene caused in excess of $10 billion in economic damages in its traverse across the mainland. This includes costs for damage to trees, power outages, evacuating millions of people, flooding, and business interruption.

Special hurricane deductibles have been introduced in 10 of the states affected by this event (DE, MA, MD, ME, NC, NY, RI, SC, VA), increasing the portion of hurricane damage that is the responsibility of policy holders, stated EQECAT in a media release. Hurricane deductibles are separate thresholds, usually higher than normal fire deductibles, that damage must exceed before insurers will indemnify losses. Hurricane deductibles from 1% to 5% of the structure replacement value are not uncommon.

The overall insured loss estimate for the US is from $1.5 billion to $2.8 billion. About two-thirds of the losses attributable to personal lines policies, and the remaining one-third attributed to commercial/industrial insurance policies, according to EQECAT.

Meanwhile, A.M. Best Co. expects the overall financial impact of Hurricane Irene to the US P&C industry to be generally manageable given the current strength of the industry.

Watch Canadian Insurance Top Broker for more on this story

With files from the Canadian Press