Important Coastal Property Takeaways For Insurance Agents From The ‘Bomb Cyclone’ Storm

The 2018 “bomb cyclone” has left its mark up and down the East Coast of the United States. For coastal regions that aren’t necessarily prepared for this type of weather system, an extreme storm like this can leave coastal residents scrambling to deal with the aftermath. Boston experienced extreme flooding and record-breaking tide levels that the weather service says are the highest ever in the area since it began keeping records in 1921.

The new Boston record far surpasses the one set during the last record-breaking winter storm flooding in 1978. In addition to beating the record, there is something else about the flooding resulting from this “Bomb Cyclone” that makes it so significant – it happened extremely fast. During the 1978 blizzard, it took several days and tidal cycles for the tide levels to get high enough to break records. This week’s record was set in just one single tidal cycle.

Meteorologists have used the term “bomb” before, but this time around social media caused the term to go viral. A bombogenesis or “bomb cyclone” occurs when a storm drops 24 millibars of pressure in 24 hours. This storm was expected to intensify at twice that rate. Coastal residents from New England to South Florida were ill-prepared for such an extreme winter event, leaving them vulnerable to damages caused by winds, freezing rains and tidal flooding. If the bomb cyclone ends up becoming a “bomb” on the coastal economy, it’s likely because these areas are less acclimated to this type of extreme weather.

Insurance agents in particular should be aware of this catastrophe’s potential impacts on their clients and their properties. Because of the nature of the disaster and coastal locations, there are a variety of different risks working together to make this storm disastrous for insurers of coastal property. From wind damage to storm surge, flooding, and beach erosion, insurers need to be prepared for numerous sorts of claims. Here are a few coastal property takeaways for insurance agents from the “Bomb Cyclone” storm:

  1. Don’t underestimate risks. Risk underestimation can occur when agents neglect rare weather risks that have a drastically lower probability than other common events. Floods, for example, are a commonly underestimated weather event. A recent study by Fathom suggests that current U.S. federal flood maps underestimate the number of Americans at risk for flood by more than 27 million people. Last year during Hurricane Harvey, the lack of attention to flood risk in the Houston area had many insurance firms suffering costly financial setbacks.
  2. Prepare your clients. As coastal weather continues a trend of record-breaking events, remind clients to be prepared for the unexpected. Well-prepared clients can help minimize damage to their property reducing the likelihood of large insurance claims after an extreme weather event.
  3. Future sales opportunities. After an extreme weather event, residents’ awareness of preparedness increases. Often, there is a jump in insurance inquiries directly after a hurricane, flood, or another damage-causing event from people in the area and beyond. If agents are not able to take calls, they can miss out on sales opportunities. Agents can pick up business after an event by being available for the influx of inquiries directly after an event and also by reaching out to clients to update or add to their coverage after an extreme event has occurred.

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