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2012 to go down as costly year for weather disastersPosted On Thu, January 3, 2013
Last year proved to be an especially active year for catastrophic weather events, as evidenced by the insured losses that were generated in the storms' aftermath.
According to reinsurance firm Swiss Re, economic losses deriving from weather disasters in 2012 will likely top $140 billion, most of which resulted from Hurricane Sandy - a storm that left millions of people without power for several days along the East Coast. Of these losses, $65 billion were insured.
Kurt Karl, chief economist at Swiss Re, noted that many lives were tragically lost due to these storms. While nothing can replace families' loved ones, "many people and businesses can rely on financial relief from insurance cover."
Though Sandy was the most damaging event to take place throughout the year - second only to Hurricane Katrina in terms of overall damage totals in U.S. history - there were several other weather events that proved to be nearly as destructive and costly. Swiss Re notes that at various points during the summer, more than half of the country experienced a significant drought period. This resulted in approximately $11 billion of insured losses for property owners, especially farmers and agricultural workers.
Other costly events included a stretch of severe storms and tornadoes that occurred in March, April and July. Combined, these storms resulted in nearly $7 billion worth of insured losses.
While some say that a greater number of claims typically leads to an increase in insurance rates, industry experts say that multiple factors are taken into consideration when determining whether premiums will rise or fall. This includes the cost of building materials and liabilities that specific policyholders have.
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