Irene's wrath only the start of hurricane season

 Irene marks only the start of hurricane season which tends to peak in September. Hurricane season also highlights the potential threat to the insurance industry, which has already been slammed with flooding and deadly tornadoes throughout the Midwest as well as the earthquakes that took place in New Zealand and Japan, not to mention the latest one along our east coast. Fox 59's recent article on Hurricane Irene and the importance of insurance (making sure your homeowners insurance covers flood, or having both homeowners AND flood insurance) also brings to light the effects mother nature has on the insurance industry.

"A hurricane barreling up the East Coast has the potential to cause the worst damages to the region in more than 50 years -- and insurers will likely feel the brunt of it.

The prospect for damage is frightening for an industry of property and casualty insurers that has already faced abnormally high catastrophe losses this year just from natural disasters.

To put this in perspective, Hazel would be considered a multi-billion-dollar storm that reached Category 4 levels at its peak by today's terms. Irene smashed into the Bahamas early on Thursday as a Category 3 hurricane, but some meteorologists warn it could ramp up speed over the Carolinas before "calming" to a Category 2 near Washington D.C. and New York.

Still, weather experts predict Irene will not be able to weaken quick enough to stop her from causing serious damages along the coast, including massive flooding, power outages and property damage from wind.

Even if she weakens or doesn’t deliver a direct hit, insurance broker Willis warned the massive size of the storm, which is roughly 400 miles wide, could create “significant storm surge” that it says would “likely impact the commercial insurance market,” producing an immense rush of personal and commercial property claims.

(While potentially devastating for coastal inhabitants, a surge is less threatening to big insurers, as their home-insurance policies typically don’t cover flooding caused this way.)

Irene marks only the start of the hurricane season and highlights the potential threat posed to an industry that has already been pummeled this year by deadly tornadoes and flooding in the Midwest, as well as earthquakes in New Zealand and Japan. Atlantic hurricane activity tends to peak in September."

By Jennifer Booton

Published August 26, 2011

| FOXBusiness