Polar vortex batters the insurance industry

winter water homeowners insurance industry

Polar vortex slams into the US, causing significant problems during the first two weeks of January

The first two weeks of 2014 were marked by an unusual natural event that has been called the “polar vortex.” The event affected the majority of the U.S., causing property damage throughout the country as well as business interruption. The polar vortex broke into the U.S. on January 3, 2014, and lingered for nearly two weeks thereafter, bringing freezing temperatures and heavy snowfall to many states throughout the country. All states, including those notorious for their high temperatures, experienced freezing temperatures.

Polar vortex causes an estimated $5 billion in economic damage throughout the country

winter water homeowners insurance industryThe polar vortex has had an impact on the insurance industry as well as the national economy. An estimated $5 billion in economic damage was caused by the event, which much of this damage coming from business interruptions and property damage. Property damage was quite significant and typically occurred from freezing and unfreezing pipes. Heavy snowfall also caused some damage to properties and damages related to the polar vortex were particularly pronounced in southern states.

Businesses face serious financial damage from event

Some 20,000 flights were cancelled due to weather issues associated with the polar vortex and major airlines expect to lose a combined $100 million due to the event. Several thousand businesses throughout the country were shut down due to roads being blocked by snow and other issue. Emergency services also suffered during the event as they had little to no way to respond to emergencies in an effective manner. Insurers have been busy assessing the damage caused by the event.

Insurance industry continues to manage claims associated with polar vortex

The insurance industry is typically well suited to handle natural disasters, but the polar vortex has caused damage on a national scale. The complete impact of the event is not yet known, though early estimates have been issued by insurance groups and federal officials. Insurers are still receiving claims from the event, but the polar vortex has dissipated in the latter weeks of January. Whether a similar event will occur next year is impossible to tell.

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