Storm surge, tide surge or rainwater flood?

Hurricanes produce strong, powerful winds, but it’s actually the water that causes most of the destruction, accounting for nearly 90% of fatalities.

The standard ISO property, homeowners, and dwelling coverage forms each contain a water exclusion that extends to exclude loss caused by storm surge. It seems that recent hurricane paths have come further inland and resulted in an inordinate amount of flood loss. How can one determine if a loss in an inland area is from flooded rainwater or a storm surge?

Of all the damage caused by hurricanes, storm surge presents the greatest threat to life and property along the coast. Hurricanes produce strong, powerful winds, but it’s actually the water that causes most of the destruction, accounting for nearly 90% of fatalities, with about half of those due to storm surges. The size and strength of a storm surge can break down barriers such as dunes, levees, and barricades and sweep through an area swiping away everything in its path, flooding communities, and leaving death and devastation in its wake.

Storm Surge

Storm surge is an undefined term in insurance policies, so what exactly is a storm surge?

According to the National Oceanic and Atmospheric Administration (NOAA), the definition of a storm surge is as follows:

Storm surge is the abnormal rise in seawater level during a storm, measured as the height of the water above the normal predicted astronomical tide. The surge is caused primarily by a storm’s winds pushing water onshore. The amplitude of the storm surge at any given location depends on the orientation of the coastline with the storm track; the intensity, size, and speed of the storm; and the local bathymetry.

Put more simply, as a hurricane closes the gap between sea and land, its winds push a huge volume of ocean water ashore, which is a storm surge.

The storm surge begins over the open ocean as strong hurricane winds push the ocean waters around, causing water to pile up under the storm. As winds swirl around the storm, the seawater is pushed into a mound at the storm’s center. The height and extent of this pile of water depend on the size and strength of the hurricane. The faster the wind speed, the more water is able to pile up. At the center of a hurricane, air pressure is low. Low air pressure causes a slight bulge in the ocean, which adds to the pile of water that causes the storm surge, allowing for about 5% of the mound.

Tides

The tide time is well known to be an important factor in the impact a storm surge will have at landfall. At high tide the water is already elevated so if landfall occurs during high tide it will cause the surge to reach higher levels and push the water further inland, such as what happened when Hurricane Isaias hit Myrtle Beach, S.C., in 2020. In that example, the storm surge was only four feet but the water level was more than 10 feet above normal.

However, according to the NOAA, a storm surge should not be confused with a storm tide. A storm tide is defined as the water level rise due to the combination of a storm surge and the astronomical tide. Even though the rise in water level can cause extreme flooding in coastal areas when a storm surge coincides with normal high tides and can reach up to 20 feet or more. The storm surge is created by water being pushed by the force of winds moving cyclonically around the storm.

Then there is also a growing concern over rising sea levels and its influence on storm surges. As the water warms, it expands, so as global temperatures rise it raises the sea level. The melting of ice sheets and glaciers adds to this. Together, they elevate the background ocean height, meaning that with the higher elevation the hurricane storm surge can bring the water further inland.

Another contributing factor is the depth or shallowness of the sea floor. For example, if the sea floor gradually slopes away from the coastline it’s more likely to have a higher storm surge than if there is a steep drop-off of land into the sea. This can be contrasted with Louisiana and Miami — the storm surge will be greater in Louisiana than in Miami because the sea floor in Louisiana is wide with a gradual shallow slope while in Miami the sea floor drops off very quickly.

Also, the shape of the coastline affects the shape of the surge. For example, when a storm surge enters a bay or river the shape of the land can act as a funnel, sending the water surge higher. The wind speed affects this greatly, as slow-moving storms tend to cause more storm surges in coastal bays and estuaries, such as what was seen with Hurricane Sally in Florida and Louisiana.

The angle that the storm comes in also impacts the surge. A hurricane that heads straight towards a coastline is more likely to cause a higher storm surge than one that hits the coast at an oblique angle or travels parallel to the coast.

Rainwater

At what point does the water stop being from the hurricane surge and become rainwater? Storm surge is not related to the amount of rain that falls within a storm. So from the above information about storm surges, we can determine that normal rainwater, would not meet the definition of a storm surge. Once the storm moves inland, the wind is no longer pushing the water cyclonically across the ocean. Rather, it is now a rainstorm.

The slower a storm moves, the more rainfall can accumulate and cause flooding. Rainfall projections for Hurricane Ian range from 6-20 inches in some areas. Pockets of unusually intense rainfall up to twenty-five inches. This amount of rain will create catastrophic flooding. Ian is a slow-moving storm, moving at six miles per hour which allows time for several inches of rain to fall and accumulate.

Taken from https://www.propertycasualty360.com/2022/09/29/storm-surge-tide-surge-or-rainwater-flood-414-228427/

Specific Technologies Driving Insurtech Investment in 2024

Understanding the Funding Decline The decrease in funding does not necessarily spell trouble for the insurance sector but instead highlights a strategic shift, the report suggests. “The insurance industry, like many sectors, is focusing on the most promising ventures with substantial insurance potential,” the report explains. “Insurers are directing their investments toward key areas and current trends such as embedded insurance, employee benefits, and cyber risk management. This strategic investment approach signals a forward-looking mindset within the industry.” Three Key Insurtech Trends for 2024 The report identifies three major trends shaping insurtech investments in 2024: Public Insurtech Companies: Financial and Growth Strategies The report also notes that public insurtech companies are prioritizing revenue growth as their main goal. These firms are restructuring their financial strategies to boost cash flow and capitalize on rising revenue streams. Their growth prospects are supported by expanding asset portfolios and strong market demand. “Public insurtech companies are focusing on revenue growth and optimizing their financial frameworks to increase cash flow,” the report states. “The growth potential for these companies is driven by increasing revenue opportunities, broadening asset bases, and a robust market for their services.” In summary, while global insurtech funding saw a decline in 2023, the industry’s focus on GenAI, digital process management, and connected insurance technologies is setting the stage for a dynamic and forward-looking 2024.

Business

Insurer Secures Unanimous Supreme Court Victory in New York Choice of Law Dispute

In the world of sports, a clean sweep, a shutout, or a perfect game is the ultimate achievement. In the legal arena, a unanimous decision from the U.S. Supreme Court is equally rare and significant. In a notable legal triumph, Great Lakes Insurance SE achieved a unanimous 9-0 victory in the Supreme Court on February 21, 2024. This victory follows a protracted legal battle that began in the District Court of Pennsylvania, advanced to the U.S. Court of Appeals for the Third Circuit, and culminated in the Supreme Court’s decisive ruling. Background of the Case: Great Lakes Insurance SE v. Raiders Retreat Realty Company The heart of the dispute was the insurance contract’s clause selecting New York law to govern any future legal conflicts. Although the financial implications of this case were relatively minor compared to the broader marine insurance industry, the insurer’s determination to uphold a crucial maritime legal principle has significant long-term implications for marine insurance. Faced with the insured’s counterclaims—including allegations of breach of fiduciary duty, insurance bad faith, and violations of Pennsylvania’s Unfair Trade Practices Law—the insurer was confronted with serious risks. Such claims could lead to the shifting of attorney’s fees, treble damages, and more, which might normally encourage insurers to settle rather than risk pursuing justice. However, Great Lakes Insurance, supported by The Goldman Maritime Law Group, opted to challenge the Third Circuit’s decision and seek clarity from the Supreme Court. Supreme Court Ruling: A Landmark Decision In a landmark ruling, Justice Brett Kavanaugh affirmed that choice of law provisions in maritime contracts should be upheld by default. This ruling is a major victory for establishing a consistent federal standard in maritime law and avoiding a patchwork of state laws that could complicate marine insurance disputes. The Supreme Court’s decision overturned the Third Circuit’s earlier judgment, which had questioned whether Pennsylvania’s public policy concerns might override the insurance contract’s choice of New York law. By upholding the New York choice of law clause, the Supreme Court eliminated the extra-contractual bad faith claims under Pennsylvania law, thereby ensuring that the dispute could be resolved based on the merits of the insurance claim itself. Significance of the Supreme Court’s Decision This ruling represents a significant advancement in maritime law, affirming that choice of law clauses in maritime contracts are generally enforceable. The decision establishes a clear, uniform legal framework for resolving maritime contract disputes, which will streamline the process and ensure fair adjudication of future insurance claims. Justice Clarence Thomas’s concurring opinion was particularly notable for its criticism of the 1955 Wilburn Boat v. Fireman’s Fund Insurance decision, which had previously influenced maritime insurance law. Thomas argued that Wilburn Boat was incorrectly decided and stressed that a uniform and enforceable set of rules is essential for the development of maritime law. Impact on the Marine Insurance Industry The Supreme Court’s decision sets a “bright-line” rule affirming that choice of law clauses are valid unless there is a strong argument against the selected jurisdiction. By endorsing New York’s insurance laws as a reasonable choice, the ruling supports a more consistent and predictable legal environment for marine insurers. This decision represents a major step forward in maritime law, helping insurers better assess risks, determine premiums, and ensure fair and efficient resolution of maritime insurance disputes.

Storm surge, tide surge or rainwater flood?