What kind of impacts do catastrophes bring upon the insurers?

Catastrophes are disasters that have influence not only on people and the environment but also on insurers and policyholders. Disasters such as hurricanes, tornadoes, and earthquakes bring huge losses in billions of dollars. One of those disasters happened recently in USA, not only in one area but in several other ones.

The well- known hurricanes Katrina, Rita and Wilma caused lots of damages and money losses in billions of dollars. We do now consider the fact that people had to be evacuated from the city because of complete damage of hurricane Katrina. After those catastrophic incidents, US political leaders have been trying to deal with massive not only property damage but also personal loss.

The year of 2005 was a hurricane season. But a catastrophe does not only come from nature, it can be made by a man himself. An attack of the World Trade Center that happened on 9/11 was the result of huge losses. For every terrorist attack, insurers have maximum of losses. A terrorist attack is not any catastrophe, it is a planned catastrophe. There is specific coverage that insures people during catastrophic days.

Homeowners insurance policy offers its coverage from fire, windstorms, hail, riots, and explosions and theft and the cost of living. After hurricane Katrina, many people were left without shelter as they had to be evacuated form New Orleans where it all happened.

After the terrorist attacks on World Trade Center, many people left New York. The city of New Orleans was flooded till the very top and the majority of residents’ property was damaged. Not only people were left without a shelter but their property was destroyed.  Homeowners insurance will cover those people cost of living elsewhere until the buildings would get rebuilt so they could come back home.

Commercial property insurance basically covers the same losses as homeowners insurance. Yet homeowners insurance does not cover flood and earthquake damages. Any catastrophes resulted in tornadoes, hail, and windstorms bring not only damage but also deaths. Those are remained survivors, they file claims.

To the great misfortune, catastrophes make insurance rates rise. Insurers try to make new policies for a full coverage. According to statistics of 2005 losses, $8.4 billion were lost in insured property that was brought by Hurricane Wilma and the year’s catastrophe losses resulted in $56.8 billion. America faced five of the most disastrous hurricanes and among them were Katrina, Wilma, Rita, Ophelia and Dennis. They were the result of $52.7 billion. 

Is it the end of catastrophic ends? Hardly, according to forecasts 2006, another hurricane is expected to be visiting US. After catastrophic events, claims have risen to total of 90% for the state’s insurance department. Commercial losses resulted in billions of dollars. It was discussed above that insurers exclude coverage for flood coverage, and they are not going to collect premiums for that.