Florence has been downgraded to a Category Two hurricane, but people should still prepare for severe damage, says AGCS.
As Hurricane Florence approaches landfall, it has lost some of its viciousness. Although downgraded to a Category Two hurricane from Category Four, with winds currently hitting 110mph (175km/h), Florence could still prove disastrous.
Tracking to hit the mainland near the border of South and North Carolina on Friday morning, the storm is slowing as it approaches the coastline. This means it could linger longer, resulting in higher rainfall in the region – conditions similar to when Hurricane Harvey hit Houston in August last year. Hurricane Harvey ended up causing an estimated $125 billion in damage, much of it caused by disastrous flash and river flooding after the storm dropped a year of rain in one week.
"Harvey was also weakening as it approached the mainland," observes Andrew Higgins of Allianz Global Corporate & Specialty. "With Florence displaying similar behavior, rainfall of up to 30 inches can be expected in coastal areas of North Carolina with isolated areas receiving as much as 40 inches."
Higgins, a Senior Regional Technical & Expertise Manager in Allianz Risk Consulting in North Carolina, says rainfall in South Carolina is expected to range from 5 to 10 inches with some areas receiving up to 20 inches. He also cautions that dangerous storm surges are expected along the coastline ranging up to 9 to 13 feet.
North Carolina has a population of some 10 million people with most concentrated in the metropolitan areas surrounding Charlotte, Raleigh/Durham, Greensboro, Winston Salem and Wilmington. Agriculture is still a substantial economic driver as is the commercial fishing, lumber and tourism industries. More inland, Raleigh/Durham houses pre-eminent universities leading in science, biotech and pharma research.
AGCS has been reaching out to business clients in the path of Hurricane Florence to offer assistance in preparing for the storm. The company provides windstorm and flood checklists, which offer detailed advice on what to do before, during and after events to help minimize potential damage. What works for business clients should also be foremost in the minds of private customers of Allianz as well.
Higgins says preparation before the hurricane is critical to minimizing property damage. This particularly applies to companies that want to limit business interruption (BI), the impact of which can often be underestimated. According to AGCS analysis of large BI insurance claims worldwide (including non-natural catastrophe events), the average large BI property insurance claim is now in excess of $2 million, which is around a third higher than the corresponding direct property damage loss.
"Allianz recommends every business located in a hurricane prone area have a comprehensive, written emergency response plan that is reviewed and tested annually,” says Higgins. “A good plan will enable the business to quickly implement measures after the disaster to restart production as quickly as possible and to limit business interruption losses.”
Whether for a business or a home, hurricane planning involves understanding the susceptibility of property to high winds, storm surge and inland flooding. Preparing for flooding can be very different from preparing for high winds. For example, the majority of preparations for Hurricane Sandy were based on a high wind event, leaving many people and businesses unprepared for the extreme flooding that occurred.
Higgins also recommends that contingency plans are reviewed and updated regularly as emerging risks become evident. A well-developed contingency plan provides businesses with the tools to get back up and running as quickly as possible. Even if a facility sustains minimal damage from a hurricane, the operations may be interrupted by power outages and accessibility issues.
“People should also read and understand their insurance policy,” says Higgins. “It is important to know what is covered, where there may be gaps and how they can be reasonably plugged.”
Allianz is already sending claims adjusters to Raleigh and Columbia in South Carolina to support customers with insurance claims once the storm passes.
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