Skip to content
McKenzie Intelligence Services5/7/24 3:38 PM6 min read

Wind vs Flood: The Importance of Multi-Peril Damage Assessments Following Hurricanes

With the 2024 Atlantic hurricane season looming, there’s been widespread forecasts for a busy year as the Pacific transitions from warm El Niño conditions to cooler La Niña temperatures, which is typically a driver of increased hurricane activity in the Atlantic basin. As a result, Colorado State University has predicted as many as 23 named storms, 11 hurricanes, and 5 major hurricanes in their pre-season forecast, all of which are above the long-term average recorded between 1950-2023. 

Although most people are acutely aware of the dangers of a busy hurricane season, particularly in more traditionally vulnerable areas such as Florida, this does not always mean they have the necessary coverage in place to ensure a smooth and speedy recovery when disaster strikes. 

A major contributor to this is undoubtedly the complex policy definitions of insurance covering either wind or flood damage.  

Given that hurricanes by their very nature can wreak both wind and flood-driven destruction, the highly specific parameters which the insurance industry tends to attribute to either wind or flood damage can create significant confusion following hurricanes. Consequently, this can mean policyholders may find themselves unprotected and insurers can be faced with complex, time-consuming claims processes as they try to verify the validity of claims by establishing the proximate cause of property damage. 

Identifying the problem 

Typically, standard home insurance policies will cover damage caused by wind, but not damage caused by floods. There are, however, exceptions in areas of greater vulnerability, such as disaster relief funds like FEMA’s National Flood Insurance Program, which protects 23,000 participating communities and is the US’s largest single-line insurance program, providing nearly $1.3 trillion in coverage against flooding. 

Given how easy it is for hurricanes to cause significant damage to properties, being able to recover from their effects is of paramount importance. This is why, in their immediate aftermath, it’s vital to be clear about the cause of any property damage, to ensure that resources can quickly be provided to support those in need. 

Firstly, it’s important to explain the distinction between wind and flood damage, by discussing the behavioural patterns that are typically attributed to them when insurers send adjusters out to assess claims. 

Understandably, wind damage tends to go from the top-down, which will affect things like roofs, windows, walls, and power lines. It can also throw objects around which have the capacity to cause damage, which is why in places like Florida, people are advised not to plant tall trees around their properties or have other potential projectiles nearby which could crash into properties and affect their claims if there is evidence of any kind of negligence. 

Conversely, flood damage goes from the bottom-up, where even just a few inches of water could mean thousands of dollars' worth of damage as basements and ground-level floors become submerged. Floods can also rip houses out of foundations, destroy possessions and affect infrastructure like electricity and plumbing, so the insurance must cover both property and possession damages, making it inherently more expensive. 

Of the two, it’s indisputable that flooding has the greater capacity to cause severe damage to properties, given that it was the second biggest driver of insured losses in 2023. Of course, this is why it’s more expensive to take out flood insurance, however, because wind can drive flooding, this adds another layer of complexity to this prevalent industry challenge. 

Ultimately, being insured for both wind and flood damage is a necessity in hurricane-prone regions, yet a significant protection gap remains and the potential for people to have their properties decimated by hurricanes, without the right policies in place to protect them, is alarming. 

Free Hurricane Katrina Flooding photo and picture

The MIS solution

As people look to financially recover post-hurricane, many claims will come in and insurers will typically have to spend considerable time and money assessing their validity. Internal teams often work in a siloed fashion as they look to deal with both wind and flood-driven damage claims, attempting to secure the necessary resources to send adjusters out and quickly settle payments. 

To ensure both the protection of policyholders and insurers, MIS, through GEO and partnerships with an unmatched breadth of trusted multi-source data providers, provides both wind and flood damage assessments following hurricanes. This enables insurers to understand the potential effects of either peril on their portfolios, allowing them to make calls on claims much faster and with greater accuracy than ever before. 

The provision of these multi-peril damage assessments ensures that claims teams can work together to evaluate claims, as they’ll be able to know which areas are most affected by the different perils, ensuring resources can be appropriately allocated and that the claims process can be expedited. 

MIS clients write a wide range of business from residential to large commercial property, utilising the flexibility and resolution of MIS’ damage and hazard assessments to provide bespoke response to different business lines.  

By hosting their exposure data in GEO, MIS clients receive comprehensive and actionable insight into their total exposure from both perils at a portfolio, policy, and property-level view, within hours and days of an event taking place. This commitment to rapid response and accurate, building-level assessments ensures that clients feel like they can effectively be on the ground, in the immediate aftermath of an event, without needing to commit further time and resources to be there. 

The depth of MIS damage assessments enables clients to identify high-loss lines of business, such as hotels with roof damage, where water ingress causes not only physical damage but significant business interruption, so expected claims from these specific sites can be prioritised to mitigate the potential loss. GEO can also be used to highlight properties with basements that have been impacted by flooding, which allows for decision-makers to proactively provide relief through deploying water pumps to restrict further damage. 

Bolstered by an expert team of military/NATO-trained analysts, MIS damage assessments provide a depth of coverage which AI in isolation cannot, such as pointing out high water lines and other evidence of flooding, even after a flood has subsided. 

With such detailed insight into how each peril is causing damage to affected areas, clients can be proactive in their communication with policyholders who have only been impacted by flooding to provide coverage information, reducing the costs and complexity of handling non-covered FNOL calls, whilst ensuring they keep their promises to policyholders with interim payments for additional living expenses, without the need for time-consuming, resource-intensive visits from adjusters. 

MIS hurricane coverage 

MIS has responded to global hurricane events for several years, including 2022’s Category 5 Hurricane Ian, as well as Idalia and Otis in 2023. 

Via our data-led intelligence platform the Global Events Observer (GEO), our team of NATO-trained analysts assess imagery and data from trusted global sources in the aftermath of hurricane, to provide insurers with the required insight to swiftly respond to those in need, helping to clear up any confusion between wind and flood-driven damage.  

Within 24 hours of a hurricane, we can provide clients with an in-depth report and Exposure Layer, followed by a Claims Layer and detailed building-level damage assessment after a further 2-3 days.  

Contact our team today to see what GEO can do for you.