Water Damage Claims Expected to Spike Due to Strong El Nino

By Denise Johnson | January 26, 2016

Winter Storm Jonas’ message to homeowners – a challenging winter lies ahead. The storm that affected 20 states was the result of a particularly strong El Niño, according to the latest Farmers Insurance Seasonal Smarts Digest.

The storm brought a combination of freezing rain, coastal flooding and blizzard conditions to much of the Mid-Atlantic and Northeast regions of the United States, RMS reported.

AIR Worldwide reported that two tornadoes in Mississippi resulted from the storm and that wind gusts reached hurricane strength.

“It is still too early to estimate damage totals, but this event could rank as one of the more significant events in recent history,” said Jeff Waters, a meteorologist at RMS.

“Winter is already a challenging season for many homeowners, but the moisture from El Niño will likely create additional headaches this year,” said Paul Quinn, head of claims customer experience at Farmers Insurance. “This year’s unique weather conditions mean we may see hazards like flooding and power outages combine with more traditional winter hazards, like ice dams and frozen pipes, as major concerns for homeowners.”

El Niño, typically characterized by warmer than normal temperatures in the Pacific Ocean, is expected to create wetter-than-average conditions in much of the U.S. Homeowners in the South, Mid-Atlantic and southern portions of New England, as well as in California, Texas and Florida, will likely see an increased risk of flooding, water damage and power outages, the insurer said.

Though Farmers data shows that only 27 percent of power outages occur during the first three months of the year, the number is likely to increase in 2016 due to El Niño. An increase in the number of water-related claims is expected in certain parts of the country too. According to Farmers, nearly a third (33 percent) of water-related claims occur between January and March each year.

The severe weather that moved through the states of Texas, Oklahoma and Missouri near the end of December caused heavy rain, strong winds and hail. Multiple tornados damaged more than 600 homes in Northern Texas, the insurer stated. As of mid-January, Farmers reported more than 3,900 claims filed already and anticipate another 4,000 claims as a result of the storms. Losses for the storms is estimated at nearly $90 million.

Winter Weather Concerns

During the winter months, much of the nation’s homeowners have to deal with snow, ice and cold temperatures regardless of El Niño. In fact, winter storms caused an estimated $3.5 billion in insured losses in 2015, according to the Insurance Information Institute.

Multi-billion dollar losses are already expected as a result of Winter Storm Jonas. The storm caused snow to pile up to 40 inches in some parts of the Eastern Seaboard. Snowfall accumulation records were broken in multiple cities, including New York City (30 inches); Baltimore (29 inches) and Harrisburg, Pennsylvania (30 inches).

“Economic and insured loss will likely be driven by a combination of factors, including roof collapse from high snow loads, coastal flooding and business interruption claims as a result of travel delays, widespread power outages and closed businesses,” said Waters.

“The storm coincided with a full moon and high tide, which increased the tidal effects of coastal flooding from Delaware to New Jersey,” added Dr. Eric Robinson, senior scientist at AIR Worldwide.

The snow accumulation caused roof buckling in several states. In addition, AIR Worldwide reported that roof collapses occurred in Philadelphia, York County and other areas of Pennsylvania, as well as Maryland, Virginia, New Jersey, Kentucky and elsewhere. The snow accumulation also increased the risk of ice damming.

After a winter storm, homeowners should look for the following three common home damage hazards, according to Quinn:

Ice Dams: An ice dam is a ridge of ice that forms at the lower edge of a roof, preventing melting snow from draining properly. Water can pool behind the dam and may eventually leak into a home. Farmers data shows that nearly three-quarters (72 percent) of ice dam claims occur during the first three months of the year.

Frozen Pipes: A total of 75 percent of Farmers home insurance claims linked to frozen pipes occur between January and March.

Heavy Snow and Ice: More than two-thirds (70 percent) of claims resulting from the weight of snow and ice on homes occur between January and March. As winter progresses, ice and snow can build up on a roof. The extra weight may stress the roof and increase the potential for leakage and damage.

According to the Rocky Mountain Insurance Information Association, many winter storm damage claims can be attributed to wet, heavy snow causing collapses to roofs, porches, awnings, carports and outbuildings.

An analysis of The Hartford’s claims a few years ago found that frozen pipes, hail damage and tree collapses were the costliest winter homeowner claims.

Latest Comments

  • January 29, 2016 at 4:14 pm
    steve says:
    Milner, every summer (June?) I see "freezing" claims due to a homeowners failure to take his hose off of his outdoor "frost free" spigot last fall. he doesn't realize it froze... read more
  • January 27, 2016 at 9:55 am
    Milner says:
    More informative would be the proportion of snow, ice, and freezing claims occurring in July and August. At least that would inform us on the quality of their claims coding.

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