Homeowners insurance faces another powerful blow from natural disasters
Oklahoma City, Oklahoma, fell victim to a powerful tornado earlier this week. The tornado had been classified as an EF4 at the time it reached the city on May 20. The tornado boasted of more than 200 mile per hour winds and cut a path of destruction through the city and its surrounding area, claiming the lives of 24 people. State officials are now declaring the event an official disaster, which may be of some benefit to the homeowners insurance sector and those affected by the devastating storm.
Oklahoma City declared a disaster zone
The federal government has joined Oklahoma officials in declaring the event a major disaster. This disaster declaration enables the state to make use of federal resources that may aid in the recovery process. The homeowners insurance sector will also likely benefit from these resources as well as they can be used to manage claims and assess the damage caused by the powerful tornado. While insurance companies have deployed claims teams, there have not yet been any initial reports concerning the extent of the damage caused by the event.
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More severe weather predicted this week
The National Weather Service is predicting more severe weather to take place throughout the remainder of the week. This may not bode well for the homeowners insurance sector, which continues to struggle with the frequent onslaught of natural disasters. The homeowners insurance industry is still reeling from the impact of 2012’s Hurricane Sandy and many insurers are concerned over what the future may hold for Oklahoma and the other states that reside in the notorious region known as Tornado Alley.
Severe storms continue to cause problems for homeowners insurance sector
In 2011, the city of Joplin, Missouri, was the victim of an EF5 tornado, which leveled a significant portion of the city itself. This tornado caused an estimated $2.86 billion in damage. A similar event unfolded in Tuscaloosa, Alabama, last year, causing a significant amount of property damage as well. Homeowners insurance companies continue to struggle with the risks that are associated with this region of the U.S.