As estimates from Hurricane Matthew continue to come in, the numbers are climbing into the billions. Boston-based insurer, Karen Clark & Company (KC&C),
estimates that insurers will pay approximately $7 billion for damages from
wind, storm surge and inland flooding.
Other estimates put the damage somewhere between $8 and $10 billion.
Among the most severely impacted coastal areas were Daytona Beach,
Fla.; Tybee Island, Ga.; Savannah, Ga.;
Charleston, S.C.; and Hilton Head, S.C.
Several towns in North Carolina exceeded
their 500-year flood levels with significant
precipitation. According to the NOAA,
Fayetteville received 12.05 inches, Raleigh
had 8. 17 inches and Goldsboro experienced more than 15 inches of rain.
What does all of this mean for insurers?
Companies were moving resources and
assigning claims areas well before Matthew hit. After the storm, insurers knew
where they needed to deploy their teams,
and some faced a variety of challenges.
“Smaller insurers have been scrambling to
get adjuster representation,” explained Peter Crosa, of St. Petersburg, Florida-based
Peter J. Crosa & Co., and the president
of the National Association of Independent Insurance Adjusters (NAIIA). “The
Carolinas appear to be the most severely
impacted and Hilton Head has been devastated.” Many of the claims involved second homes that were mostly unoccupied.
Crosa says that NAIIA members from
across the country have sent adjusters to
the affected areas to help member firms
manage their claims load.
Mike Hearn, director of customer suc-
cess at Spex, a property inspection plat-
form company based in Denver, Colo.,
was traveling through North Carolina
after the storm. Some of the homes ex-
perienced anywhere from a few inches to
several feet of water. “As with most hur-
ricanes, damages are generally associated
with heavy winds, large amounts of rain-
fall and storm surge. There is plenty of
wind damage from Hurricane Matthew
in the form of downed trees and shingle
losses to roofs,” shared Hearn.
“In some cases, houses were complete-
ly inundated with water,” said Hearn.
“Making matters worse is the fact that
many of these homes had no flood insur-
ance since they were not declared to be in
The 48 counties affected by the hurri-
cane in North Carolina, are also home to
many of the key agricultural producers for
the state. Harvest season was just begin-
ning for crops like soybeans, sweet pota-
toes and peanuts. According to the North
Carolina Department of Agriculture &
Consumer Services, 1.9 million chickens
were lost during Hurricane Matthew and
that number could grow even higher after
the flooding recedes. Hog farmers seem to
have fared better, since many farmers were
able to relocate their animals to higher
ground. The impact of the storm will be felt
in grocery stores in the months to come.
A week after Hurricane Matthew struck
Florida, almost 40,000 claims had been
filed according to the Florida Office of
Insurance Regulation. In North Carolina,
State Farm insures the largest number of
homeowners, and had moved its catastrophe response team into the affected areas,
concentrating on the most severely impacted first. Nationwide and other insurers are also working throughout the state.
Many insurers are relying on various
types of technology to investigate and
manage these losses. “Technology is be-
coming more prevalent with this event,”
said Hearn. “We have heard of drones be-
ing used on some claims, as well as cloud-
based mobile-first software to expedite
claims handling. The best-suited software
for recovery efforts like this don’t require
connectivity, since internet access re-
mains an issue in many cases.”
Like hurricanes Katrina and Sandy, Mat-
thew will offer insurers the opportunity to
further refine their catastrophe response,
educate policyholders on how to prepare
for and mitigate the risks associated with
storms and other weather events, and
demonstrate how insurance is far more
than just the policy that was purchased.
Recovering from Matthew
By Patricia L. Harman