As new daily COVID-19 cases reach new highs across the United States, Insurance Journal and Willis Towers Watson remind us of another set of catastrophes on the horizon: hurricanes and floods. June 1st marked the official beginning to the North Atlantic hurricane season. While no major storms have hit the United States yet this season, Colorado State University predicts this year to be a “very active” hurricane season, due to higher than average sea surface temperatures in the Caribbean and central tropical Atlantic. Flooding caused an average of $3.3 billion dollars in losses per year from 1980 to 2018. A very active hurricane season means that losses this year will likely be above that average.
The 2020 hurricane and flood season could worsen both the economic and health crises facing the United States. 29.0% of the US population lives in coastal counties, and 31.9% of businesses are located in coastal counties. Business sectors are not evenly distributed geographically, though. The arts, entertainment, & recreation (“AE&R”) and the real estate & rental industries, which have already seen significant declines in business activity during the COVID-19 pandemic, are heavily concentrated in coastal counties. 39.5% of AE&R and 37.4% real estate & rental businesses are in coastal regions, many of which are at risk for hurricanes and floods.
Critically, flooding caused by hurricanes will also put additional pressure on emergency services. Resource use for rescue efforts and dislocation are not the only issues associated with hurricane flooding. Vector- and water-borne diseases spread rapidly and easily in floods, which could put further strain on hospitals and medical workers. Mold from the resulting dampness may also exacerbate respiratory symptoms and could make it harder to detect COVID-19.
Insurers have largely avoided claims from business interruption due to COVID-19, because of the lack of physical damage to property. Catastrophe and business interruption claims will be on the rise, however, as hurricanes make landfall. Coastal businesses, their insurance carriers, and those grappling with COVID-19 relief efforts have yet another crisis looming.
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