Hurricanes Devastate Canadian and U.S. East Coast

The east coasts of Canada and the U.S. both felt the lash of Mother Nature with hurricanes in the form of Isabel and Juan causing widespread damage over a short period of time. In Canada, Hurricane Juan slammed into Nova Scotia and PEI, with winds topping 145 km/h, causing significant damage and putting insurers on high alert. For days following the storm, claims were slow to trickle in due to power outages in the affected areas, specifically around Halifax-Dartmouth.

However, at least two companies operating in the devastated region were able to comment on exposures, with ING Insurance saying more than 400 clients had reported claims totaling about $5 million in value. Royal & SunAlliance Insurance Co. of Canada says it received at least 300 claims. Most claims relate to damage to homes, cars, boats and businesses. The Insurance Bureau of Canada (IBC) notes that much of the damage stemmed from falling trees and debris. No official estimate of losses has been made, but sources say damage is significant, and the IBC says that generally damage from windstorm and sewer backup is covered under property policies. IBC regional vice president Don Forgeron adds, “most companies are treating this as the extreme event that it was. In general, claims submitted in the hurricane’s wake will not affect claims-free discounts.”

Commenting on the damage, Crawford Adjusters Canada regional vice president of operations Grant King says, “Significant structural losses have been reported, in addition to a large number of claims from homes and businesses for roofs, fences and decks that were damaged. We also expect to receive some claims for personal watercraft that were damaged in the storm.” He reports that, as of early October, claims staff faced two challenges: some areas were still without power, and a availability shortage of contractors to handle the overload of temporary repairs needed.

The U.S. coast suffered the wrath of Hurricane Isabel in mid-September, with the Insurance Services Office (ISO) estimating insured damages at about US$1.17 billion. Isabel, a “category 2” hurricane, cut a swath through North Carolina and Virginia, with states as far north as New York experiencing residual flood damage. The storm was blamed for more than 35 deaths, and caused power outages affecting millions.