10 Years After Katrina: An Insurers Prospective
On August 24, 2005 meteorologists at the National Hurricane Center began to give warning that in five days’ time, a tropical system could potentially impact the Gulf Coast. As the storm intensified evacuations were ordered in New Orleans. Many elected to leave town, while others decided to ride out the storm.
On Monday morning, August 29th, Hurricane Katrina made landfall near the Louisiana-Mississippi border, devastating many cities. In New Orleans, breaches in the levees and flood walls north of the city resulted in massive flooding, killing hundreds and causing catastrophic damage.
This is how most of us remember the historic storm that is now ranked as one of the most costly hurricanes to ever hit the United States. The devastation, the sheer magnitude of the event, makes this a lasting memory for the insurance community, and for us all.
There are many things that can significantly impact a community, but nothing quite like the catastrophic events brought by Hurricane Katrina. As with any challenge, some benefit for the future was born from the devastation of the storm, as it tested Gulf Coast communities, first responders and the insurance industry. It taught us all valuable lessons and highlighted the importance of things like educating the public on purchasing flood insurance, storm mitigation tactics and properly preparing your home for a hurricane; minimizing business disruption in the aftermath of a catastrophe and having flexible disaster recovery plans; and improving catastrophic modeling and predication of such events.
Insurance companies have always had disaster recovery plans, though none of them could have predicted the mayhem Katrina brought. The communication challenges presented by downed power lines and a lack of internet connections caused many businesses including insurers to re-evaluate their service response. To help meet policyholders needs immediately following an event, insurers now deploy a fully functional mobile command center that can keep services up and running with minimal disruption.
Greater attention is being paid to our planned response, and the plans themselves are constantly being revaluated to ensure the industry is best prepared to assist our consumers. The use of social media has been fully embraced and significant improvements to technology allow us to communicate with our customers, in real time, during and after a natural disaster.
The insurance industry has used the valuable lessons learned in Katrina to better serve our consumers going forward, and there are many things that policyholders can do themselves in advance of a major storm that will better protect them.
Like Katrina, it only takes one major storm to cause catastrophic damage. Have a conversation with your insurance agent to make sure you have the right amount of property coverage and organize your insurance documents. You do not want to find yourself searching for your documents as the storm is quickly approaching.
Flood insurance is a must have in order to protect your property from the storm surge or inland flooding that can happen during a hurricane. Most homeowners’ policies do not cover flooding, and a policy must be purchased separately.
Create or update your family’s personal emergency plan, including information about where to go if you must evacuate. Take advantage of the “calm” and prepare “before the storm.”
Make sure you have cash on hand, a supply of fresh water, and gas in your car. Storms can make quick turns, and sometimes fall faster and stronger than predicted. That’s why it is also a good idea to purchase a weather radio, so you can track a storm even if power goes out.
In the event of a hurricane and damage to your property, contact your insurance agent first. Do not fall victim to individuals preying on families who have suffered a loss. There are fraudsters in every state, and they will take advantage of any situation.
As we remember this horrific storm, it’s important our customers know that not only have improvements been made in disaster recovery efforts in the last 10 years, but the insurance industry continues to be strong and stable. Our goal is to meet our policyholders needs and to always be there for our consumers. As we were 10 years ago, as we are today, as we will be tomorrow, and for years to come.
Joe Woods
The Property Casualty Insurers Association of America (PCI)
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