Mexico takes out disaster insurance for over $400 million

Mexico InsuranceOn Friday, June 10, 2011, Mexico announced that it had purchased various forms of disaster insurance for more than $400, in order to gain some protection in the areas that face the greatest risk of natural disasters such as hurricanes.

According to the Mexican finance ministry, the $404 million (4.8 billion pesos) of disaster insurance was purchased to “protect public infrastructure and homes in vulnerable areas.” 

This decision came after last year where there were a staggering 19 major storms that struck Central America, leaving behind damage worth several hundreds of millions of dollars.  As a result of climate change, scientists are predicting that this region will continue to be impacted by an increasing amount of severe.  The emerging economies within the area are being urged by development banks to take out insurance coverage in order to help them to cope with the cost. 

The official Atlantic hurricane season falls between June 1 through November 30.  A second hurricane season in the Eastern Pacific also exists from May 15 through to November 30. 

According to the Climate Prediction Center, the 2011 hurricane season will be similar to a number of the seasons that have been experienced since 1995.  They forecast a 70 percent chance of each of the following occurrences: 

  • 3 to 6 major hurricanes
  • 6 to 10 total hurricanes of any size
  • 12 to 18 named storms
  • A 105 percent to 200 percent ACE range of the median between 1981 and 2010 

Specific insurers involved in the one-year policies taken out by the Mexican government have not been named.

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