The late January winter storm will cause insured losses of up to $6.7 billion, making it one of the costliest winter storms since 1950.
The estimate comes from catastrophe modeler KCC, headed by modeling pioneer Karen
Clark. The tally includes privately insured losses from damage to residential, commercial and ind
ustrial properties from the snow, ice, wind, and deep freeze that engulfed more than half of U.S.
states, affecting about 200 million people starting on Jan. 23 and lasting until Jan. 27.
*Editor’s Note: Story update on Feb. 4 to add insured loss estimate from Verisk.
If KKC’s estimate is accurate, Winter Storm Fern will be the third costliest winter event to insurers, ahead of a blizzard in 1993.
Fern’s freezing temperatures caused the most damage, followed by the snow and ice. Fallen
trees and power lines caused widespread outages in southern New Mexico and Texas, up to Kentu
cky. Austin, San Antonio, and Houston recorded record low temperatures.
Losses were highest in the states of Texas and Tennessee, said KCC.
The most outages were in Louisiana through north Mississippi, into Tennessee. Prolonged outages increase the chance of damage, especially from froze
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n pipes. These effects will likely be more pronounced in the southern and southeast states since
properties are usually not constructed the types of low temperatures seen in Fern. Commercial properti
es were more significantly damage than homes. KCC said said commercial claims are
, on average, generally much higher than residential.
Verisk Says $4 Billion
Verisk on Feb. 3 said insured property and auto losses from the winter storm could reach $4 billion.
An analysis from the company’s Catastrophe and Risk Solutions Group of Verisk’s winter storm
model found that 14 from Texas to Massachusetts could reach insured losses of $50 million.
“Fern was unusually intense, driven by the collision of warm, moist subtropical air with extremely cold Arctic air,” Verisk said. “Loss estimation is further complic
ated by the storm’s varied regional impacts and ongoing power outages in the interior Southeast.”
Freeze impacts are expected to be the largest driver of losses, added Verisk.