Insured losses from winter storms in the U.S. will climb well above $2.5 billion in 2014, double the annual average over the previous two decades. You can thank the polar vortex for much of the damage, the Insurance Information Institute said in a new industry update.
The I.I.I. bases its prediction on winter storms and frigid temperatures in the first three months of the year, and a severe cold snap and heavy snowfall that gripped chunks of the U.S. in November. Weather watchers point to the polar vortex as a root cause for many major weather events during both periods, the non-profit industry organization pointed out.
I.I.I. cited reports from Munich Re that blamed 11 winter storms and cold snaps in early 2014 that led to 84 deaths and approximately $2.4 billion in insured losses. More than half – about $1.7 billion – stemmed from a polar vortex event in early January, the I.I.I. said.
Over the previous winter, it all added more problems for property/casualty insurers, the I.I.I. said.
The group cited data from the Insurance Services Office that found 42 states experienced more auto insurance claims in the 2014 first quarter, an 8.5 percent jump over the same period in 2013. States including Illinois, Minnesota, Indiana and Michigan said collision claims jump more than 20 percent earlier this year.
With that in mind, and the polar vortex hit earlier in November, the I.I.I. expects insured losses to escalate again before 2014 draws to a close. Munich Re data cited by the group determined that the Eastern United States experienced the coldest winter in more than a decade in early 2014. Right now, the U.S. overall is facing its coldest November since 1976, according to data from Weather Bell models.
Insurers have only begun to calculate losses from the polar vortex surge that brought record snow to the Great Lakes region and early winter to much of the country. But no matter what the outcome, the I.I.I. sees the final number for the year going substantially higher.
Source: Insurance Information Institute