Late storm binge has Western states singing holiday claims blues

While the nation was mostly natural disaster-free in 2006, the West suffered a few fourth quarter storms that took the blush off of an otherwise relatively rosy year. Beginning with Thanksgiving and heading into the New Year, the western states suffered high winds and unusual amounts of snow.

Snowy Colorado shuts airports
Just before Christmas, a major snowstorm paralyzed Colorado and its neighbors. Most significant was that the snow forced the Denver airport to close, halting flights and stranding travelers for a few days. Just as the state was recovering from that snowstorm, another one seemed to be heading its way about a week later.

Officials say it’s too early to predict the total insured losses.

The last major blizzard to hit Colorado occurred in March 2003. The snow fell wet and heavy that year, causing extensive and expensive damage, according to the Rocky Mountain Insurance Information Association. As structures and roofs collapsed under the weight, insured claims payouts totaled $93.3 million.

“That was the most costly blizzard Colorado had … the 100-year snowfall,” said Carole Walker, RMIIA executive director. Fortunately, she said the snow from the first storm in 2006 stayed dryer and lighter than it did in 2003, lessening the damage.

“We got a lot of [snow], though it doesn’t appear to be as heavy. There was also a lot of wind, which kept it from building up so we haven’t seen the extensive damage as in 2003,” Walker said.

According to Walker, typical claims from the initial storm included leaky roofs, burst pipes, cars sliding into garages, and the collapse of small buildings, fences and carports. Although many malls and major holiday shopping areas closed down during the first storm, Walker said business interruption claims were minimal.

“We didn’t see a lot of damage associated with business interruption,” she said.

However, she emphasized in a cautionary tone as she looked out her window, Colorado was facing a second round of storms at press time, adding to the snow it already had. With the Denver airport closed for the second time in a week, the second storm could change the claims picture.

Walker was hopeful at press time. “We are in a wait and see mode to gauge whether additional claims are going to come in as people’s businesses dig out and find more damage or delay in making claims,” she said.

According to Robert Hartwig, chief economist for the New York-based Insurance Information Institute, it is too early to tell what the insured losses will amount to, with claims only now being filed. He said typically severe winter storms of the magnitude felt in Colorado produce losses in the $100 million to $250 million range. “Again, it’s too early to tell what the full extent of the damage will be, but there are occasions when severe winter storms cost more $400 million,” he said.

“We get a lot of snow in Colorado, but usually not this much at once,” Walker added.

New Mexico and Wyoming
Not to be left out, Wyoming and New Mexico caught the edge of the powerful Colorado storm systems, which dumped snow in the states, forced highways and schools to close, and stranded travelers.

Mike Sowko, forecaster with the National Weather Service in Cheyenne, Wyo., said that the storm was the most intense to hit the area in several years, with wind gusts of 50 mph and heavy snow.

“I think it surpasses the last couple of winters,” Sowko said. “I think the March of ’03 storm was the last time we had this much severe winter activity.”

Sowko said it was difficult to determine exact snowfall amounts because they were not evenly distributed. “We have drifts up to 6 feet high in some locations, and in other areas, it is completely dry on the asphalt and concrete.”

With so many flights in and out of Wyoming communities going through Denver, air travel was disrupted around the state.

Pacific Northwest
Further to the West, more than 32,000 insurance claims in Washington and Oregon have poured in after a severe windstorm tore through the area around Thanksgiving. The NW Insurance Council said the number of claims continues to grow, and is estimated to exceed $500 million.

The storm caused 14 deaths and more than 100 people suffered carbon monoxide poisoning while trying to keep warm during power blackouts. Those statistics are giving the Pacific Northwest storm the unfortunate recognition of the worst winter storm in 13 years, according to catastrophe risk modeling company AIR Worldwide Corp.

Since the storm hit, adjusters have been working late into the evenings to aid insureds in dealing with the damage, according to the NWIC. Its member companies brought in adjusters from out of state and contracted with independent adjusters to handle the claims volume. Also, member companies said some of their employees received temporary claims duties and set up special phone banks to help customers process claims more efficiently.

“Insurance companies really show their value to customers following a catastrophe like this,” said Karl Newman, NWIC president. “It’s frustrating to deal with a windstorm loss, but it would be financially devastating to many if they hadn’t insured their homes and businesses.”

According to III’s Hartwig, on average, winter storms account for 10 percent of all catastrophe loses in the United States. With the Colorado Plains storms coming only a week after a major winter storm struck the Pacific Northwest, “this would mean that late in the fourth quarter of a relatively low cat year, the industry will be hit with a pretty expensive December,” Hartwig noted.

The Associated Press contributed to this report. Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Topics Claims Windstorm Aviation Colorado