Friday, October 21, 2016

NYC FEMA Flood Mapping Creates Insurance Uncertainties

In 2015, as many of its businesses and residents were still rebuilding from Superstorm Sandy, FEMA re-drew the flood map for New York City. The new proposed flood map designated approximately 35,000 additional residential homes and commercial buildings as being in a high risk flood zone. This would have drastically increased flood insurance premiums for thousands of New Yorkers. New York City’s Mayor, Bill de Blasio, promptly filed an appeal contesting the accuracy of the new flood map, claiming that errors in FEMA’s modeling overestimated the size of the 100-year floodplain and the height of the Base Flood Elevations.
On October 18, 2016, FEMA and New York City announced an agreement to revise the flood map, yet again, for New York City. The City also announced that until the new flood map is finalized, flood insurance premiums will be based on the 2007 flood map that were in effect prior to Sandy. The City claimed victory and announced that FEMA’s decision to revise the flood map will save coastal insureds tens of millions of dollars per year. 
Given that the changes proposed by the 2015 flood map would have had the most significant impact on coastal residential properties in Brooklyn, Staten Island, and Queens, it is uncertain how the decision to disregard and revise the flood map will affect commercial property underwriting in lower Manhattan and the rest of New York City. At this point, the only certainty is that the use of the 2007 flood map is temporary. And, while the temporary reliance on the 2007 flood map may lower premiums, insurers should continue to rely on other ways to protect themselves against a CAT when underwriting a risk, such as being more specific in excluding or limiting flood coverage or requiring a larger deductible.   
Inevitable changes to the flood map also raise questions regarding future claims. For example, what if a property that is designated by the 2007 map as being outside the flood zone is later designated to be in a flood zone during the effective dates of the policy? What flood map will insurers use to determine coverage or adjust the loss? Will a new flood map trigger questions about law and ordinance coverage and impact how an insured rebuilds? These questions may be of particular importance to policies that limit coverage to property located in high hazard areas. Given these uncertainties, insurers should take into consideration the exposures from a readjusted flood map when underwriting these risks. 
Posted by Jennifer Hoffman

Newly Discovered Fault Connections Raise San Francisco Major Earthquake Risk

While San Francisco is no stranger to the ever-looming threat of a catastrophic earthquake, a recent discovery of intersecting faults under San Francisco's San Pablo Bay has dramatically increased the risk of a major earthquake in the next thirty years.
Scientists at the U.S. Geological Survey published their discovery this week in Scientific Advances. The Hayward Fault has long been considered a threat because it runs under densely populated neighborhoods east of San Francisco. The study found that beneath San Pablo Bay, it joins with a Rogers Creek fault, a less active underground fracture to the north. This newly discovered direct link between the faults raises the possibility of a simultaneous rupture of the Hayward and Rodgers Creek faults, a scenario that could result in an earthquake up to a magnitude of 7.4 that would cause widespread property damage, extensive loss of life, and far-reaching ripple-effects on the global economy.

The relationship between these two faults had long been unknown.  Detailed subsurface imaging, geophysical interpretation and kinematic modeling by the U.S.G.S. team demonstrate that the Hayward and Rodgers Creek faults are directly connected at the surface.  The Hayward and Rodgers Creek faults combine to represent a continuous 118 mile-long fault.  If they were to break simultaneously, they could produce a magnitude 7.4 quake. 
An earthquake of this magnitude would be more than five times stronger than the 1989 Loma Prieta quake on the San Andreas Fault that killed over 60 people and caused an estimated $6 billion in property damage.  In addition, the epicenter of the 1989 Loma Prieta earthquake was located 60 miles southeast of San Francisco while the Hayward-Rogers Creek faults run directly beneath the city.  David Ponce, a scientist with the USGS research group, was quoted by Popular Mechanics on this risk:
“You have to understand that there are over 2.4 million people living right along this fault, and the population of this whole area is around 7.5 million. It also turns out that major transportation, gas, water and electrical lines cross this fault. So when it goes, it's going to be absolutely disastrous."
Mr. Ponce was also quoted as saying that there is a 32% chance that such a quake could occur in the next 30 years.
Speculation regarding California earthquakes and “the next big one” is hardly anything new, but with the Hayward-Rodgers Creek discovery this week, it appears we have a new front-runner for how that “big one” could originate.
Posted by Matt Gollinger

Wednesday, October 19, 2016

A Look Back, and Ahead, to the “California Shakeout”

Two weeks ago, the CAT-Law Navigator reviewed an Earthquake Advisory issued by the California Governor’s Office, which directed the public to prepare for an increased probability of earthquakes through October 7. The Advisory was issued following the observation of an “earthquake swarm” near Bombay Beach, California, that started on Sept. 26, 2016, beneath the Salton Sea, near the southern end of the San Andreas Fault. The U.S. Geological Survey had calculated that there was up to a 1 in 100 chance of a magnitude 7 or greater earthquake occurring on the southern San Andreas Fault through October 4 (later revised to up to a 1 in 500 chance of such an earthquake through October 7). Given those odds, it’s no surprise that a major earthquake did not in fact materialize, but the U.S.G.S. calculation and the Governor’s Advisory reminded us of The Great Southern California Shakeout Scenario, first published by the U.S.G.S. in 2008, which modeled a similar event. 

The goal of the 308-page 2008 Shakeout Scenario was “to identify the physical, social and economic consequences of a major earthquake in southern California and in so doing, enable the users of our results to identify what they can change now—before the earthquake—to avoid catastrophic impact after the inevitable earthquake occurs.” (Shakeout Scenario at p. 2) In service of that goal, the authors outlined the magnitude and locus of an imagined Southern California earthquake along the San Andreas Fault, and then estimated the resulting physical damage, the impact on social systems, and the actions that can still be taken to prepare for and minimize the impact of a Southern California earthquake.  

The authors of the Shakeout Scenario noted that although the particular earthquake scenario they modeled “may never happen . . . [b]ig earthquakes on the San Andreas Fault are inevitable, and by geologic standards extremely common, but probably will not be exactly like this one. The next very damaging earthquake could easily be on another fault.  However, lessons learned from this particular event apply to many other events and could provide benefits in many possible future disasters.” In other words, the earthquake scenario the Shakeout authors imagined is not their prediction, but it provides a thorough analysis of one possible scenario, and the author’s findings have broad application for those interested in the subject.

There is a wealth of information in the extensive Shakeout Scenario document, but here are some headline findings of particular interest to the insurance industry: the authors modeled a magnitude 7.8 earthquake along the southernmost 200 miles of the San Andreas Fault, from the Salton Sea to Lake Hughes (South and East of Los Angeles); the earthquake involves extensive and widespread ground shaking, surface level fault offsets of 30 feet, liquefaction of the earth and landslides in isolated areas, but no tsunami activity due to the distance of the event from the Pacific Ocean. All told, the authors anticipated 1,800 deaths and over $200 billion in economic losses (with property damage of $112.7 billion and business interruption losses of $96.2 billion).  For comparison, the total amount of insured losses (in 2015 dollars) stemming from Hurricane Katrina was $49 billion, still the most expensive insurance catastrophe in U.S. history. The 9/11 Terrorist Attack involved insured losses of $24.6 billion; the 1994 Northridge, California earthquake’s insured losses were $18.6 billion

We will return to the Shakeout Scenario in subsequent posts, exploring the authors’ breakdown of the nature and scope of the event itself, the predicted damage to residential and commercial buildings, the impact on California’s infrastructure, and the broader business interruption implications. We will also consider the overall social impact and the authors’ advice for steps that can be taken now to reduce the physical and societal damage of a major earthquake along the San Andreas Fault and other California faults.  

Posted by Dan Millea

Thursday, October 13, 2016


The spread of Zika in 2016 has once again brought to worldwide attention the threat posed by pandemics and infectious diseases. 
The World Bank describes a pandemic as “a global disease outbreak that represents a top global catastrophic risk.” Outbreaks of infectious disease have occurred regularly throughout history – Ebola, Avian Flu, SARS are just some recent examples - and market consensus is that a pandemic is inevitable. According to the World Bank, there is a “high probability that the world will experience a severe outbreak in the next 10 to 15 years that could destabilize societies and economies”. Despite advances in medicine and communication, the interconnectedness of international trade and travel in today’s globalised world, plus a larger (and more urbanised) population, means that pandemics spread more quickly and will affect more people. 
From a risk point of view, with their large impacts and low probability of occurrence, pandemics are catastrophe scenarios and, given the degree of their disruptive potential, one of the most important issues for the insurance industry.
In addition to human costs in terms of health and life, pandemics result in significant financial costs as a result of their associated economic and societal impact, the secondary impacts including disruption from security threats and civil commotion. The spread of an infectious disease increases both the cost of containing it and the social and economic damage sustained, and the timeliness and effectiveness of the response of international groups and governments is therefore a crucial variable. According to the World Bank, the annual global cost of moderately severe to severe pandemics is around USD 570 billion (0.7 of global GDP), and the cost of a severe pandemic like the 1918 Spanish flu could be as much as 5% of global GDP – most of the losses predicted to be those caused by resulting economic factors. Resulting losses from SARS and Ebola went into billions of dollars in the Asia Pacific region and West Africa respectively, and Zika is forecast to cost billions to Latin America and the Caribbean alone.
Due to the various impacts of a pandemic, (re)insurers may face claims across various lines.
As well as travel, health and life policies, (re)insurers may face exposures under liability policies (including employers’ liability) for alleged negligent exposure to disease. Whether the cover will respond will depend on the specific situation and policy wording, and the operations of any exclusions, for example, for Expected or Intended injuries, Pollution and Bacteria.
An outbreak will also affect a company’s operations and revenues, for example, if it is required to temporarily cease operations partially or completely due to pandemic-related issues. During the Ebola outbreak, in addition to the voluntary evacuation of employees, curfews were imposed in some countries, resulting in the cessation of operations at some sites, closure of ports and borders and disruption of global supply chains; (re)insureds particularly affected were those with business or supply operations in West Africa, particularly in the mining, energy or travel sectors. Claims may be brought for business interruption and/or contingent business interruption. BI (and CBI) is one of the most significant risks faced by a company generally, heightened by the increasing interconnectivity of global supply chains and the nature of modern production processes; in the event of a pandemic, the ‘just in time’ model of many businesses may cause supply shortages thus exacerbating the damage.
However, a standard BI policy would only be triggered after the policyholder has experienced a direct physical loss or damage to insured property; it would not automatically be triggered if an organization suffered loss of income as a result of, for example, Ebola. The general market view is that disease is unlikely to constitute physical damage to property and therefore BI losses cannot automatically result. As with any policy, everything depends on the wording and circumstances of the specific case, for example: whether contamination is considered a direct physical loss of the premises; whether BI coverage may extend to temporary closures due to “dependent properties,” such as a major supplier, or prohibited access by civil authorities to the insured’s premises due to a direct physical loss of another property. 
BI policy extensions such as Loss of Attraction, Denial of Access and Suppliers/Customers may respond but are subject to sublimits and the terms and conditions of the policy in question. Similarly, extensions of cover for Infectious Diseases, which are sometimes included within a standard BI policy to cover BI losses attributable to the outbreak of diseases, would again be subject to the wording and conditions that apply - for example, if the wording is based on “notifiable human diseases”, cover will not automatically apply as the list of notifiable diseases of public health bodies will be jurisdiction-specific, and such cover may also be subject to orders of local civil authorities. 
Re(insureds) could therefore face gaps in coverage for potentially huge costs in situations where there is no physical damage to property. There may be certain circumstances in which property may be found to be damaged as a result of disease, for example if necessary decontamination measures are destructive, or where more extensive property damage occurs as a result of the secondary impact of a pandemic, such as strains on the emergency services or shortage of personnel to carry out the necessary repairs (although exclusions applicable to secondary impacts, for example for civil commotion, will also need to be considered). Should a pandemic result in severe financial losses as predicted, it is likely that there will be increase in policyholders looking for ‘deep pockets’ and advancing wider interpretations of policy language.
However, pandemics are just one example of BI losses triggered by non-physical damage events that businesses are increasingly facing, and specific cover for pandemic-related BI exposures, or “non-damage” BI polices, is available.
Pandemics are inevitable. (Re)insurers should assess their potential exposure and, as always, review their own policy wordings. While it may be that specific exclusions are written into policies (as was the case for many UK and US insurers in the wake of Ebola), (re)insurers also have the opportunity to offer bespoke products to meet the increasing need of companies for non-physical damage BI scenarios and the other multitude of risks that pandemics present.
Posted by Deepa Sutherland

Wednesday, October 12, 2016

Phew – That Was Close(?)

As the saying goes, “close only counts in horseshoes and hand grenades.”  And maybe hurricanes?  Was Hurricane Matthew a bullet that was dodged, or a bullet that hit the mark?  That depends on who you are and where you were. 

There was a moment there when it looked like the State of Florida was staring down the proverbial barrel of a colossal disaster.  Hurricane Matthew, then a category 4 Hurricane, had devastated Haiti and was making way for South Florida.  The predicted track had  Matthew making landfall somewhere along Florida’s Atlantic Coast, tearing along the eastern border for hours and hours, and then pummeling Georgia and South Carolina before making a bizarre eastward/southward loop and slamming back into Florida a second time.  (What kind of hurricane does that?  It almost looked personal.)

But in the merciful end, two important things did not happen.  Matthew did not make landfall in Florida – which kept the most powerful winds off-shore and away from homes and businesses – and it never made the arcing loop that would have carried it back to the Florida coast for a second round of damage.  But Matthew was nonetheless a powerful storm that did its share of harm, including multiple fatalities in the U.S. and an astounding death toll in Haiti.  How you view Matthew, then, is largely dependent on who you are and what you were expecting.  Were you a Miami homeowner hoping for the best, and the storm spun east and did most of its damage north of you?  Are you a Jacksonville shop owner whose business was flooded and ruined?  Are you an insurer with concentrated exposures along the coastline?  Did you dodge a bullet, or do you feel like you took a direct hit?  It depends, but the early estimates suggest there is plenty of damage to go around thanks to Matthew – billions of dollars, in fact, on top of the human toll.

CoreLogic reports that the total insured losses for residential and commercial properties hit by Matthew will ultimately range from $4 billion to $6 billion, exclusive of business interruption losses or contents damages.  CoreLogic estimates that 90% of those losses will be “related to wind” and 10% to storm surge – numbers that seem surprising based on the storm’s track and other news reports of heavy flood damage and relatively less catastrophic wind impacts.  At $4 billion to $6 billion in insured property loss, Matthew would be dwarfed by Hurricane Katrina and Super Storm Sandy, but would still rank among the most devastating property damage storms in U.S. history.

Lucky or unlucky?  It’s in the eyes of the beholder.

Posted by Dan Millea

Staying Afloat in a Sea of AOBs

What is an AOB?
The Office of the Insurance Consumer Advocate provides the following definition for AOBs:
An assignment of benefits (AOB) is a legal tool that allows a third party to be paid for services performed for an insured homeowner who would normally be reimbursed by the insurance company directly after making a claim. AOB is commonly used when a homeowner experiences a water loss – such as a leaky pipe, an overflow from a sink, or a damaged appliance – and contacts a contractor or water remediation company for assistance. Most AOB agreements presented to the insured allow the contractor to stand in the shoes of the insured for insurance collection purposes.
How are AOBs trending?
Newly formed at the beginning of 2016, the Consumer Protection Coalition was created to raise awareness of AOB abuse.  The Consumer Protection Coalition reports Florida AOB lawsuits have increased 90,000 percent since 2000, with the predominance of claims in South Florida.  The increase of AOB claims and litigation became further highlighted when the state-run insurer, Citizens Property Insurance Corp., filed for a rate increase this year citing AOB abuse as the driving force.
Citizens data reveal a 46% rise in water loss claims in a 5-year period.  Additionally, the Citizen’s data shows those claims are more expensive and far more likely to lead to litigation, thereby increasing the overall cost of the claim. Citizens data also reveals geographic trends.  It shows that nearly 1 in 4 South Florida insureds are more likely to assign benefits to a third party (i.e. a contractor, water mitigation company, or public adjuster) prior to submitting a claim to their carrier.
What about judicial enforcement of contract provisions, such as an anti-assignment clause?
For almost a century, there has been a body of Florida case law that supports the position that policyholders have the right to assign post-loss claims without insurer consent.  A more recent example of this area of law was illustrated in 2015, when the Fourth District Court of Appeals entertained argument by an insured’s assignee who brought a breach of contract action against a homeowner’s insurer for failing to adequately compensate the assignee for emergency water removal services it performed in the aftermath of an August 2012 water event. Specifically, the water remediation company argued that the trial court erred as a matter of law in dismissing its complaint based on the anti-assignment and loss payment provisions of the policy and maintained that: (1) post-loss assignments of insurance are valid under Florida law even if the policy contains an anti-assignment clause; (2) the right of payment accrues on the date of the loss; and (3) the loss payment provision does not preclude an assignment of benefits and has never been construed to have any bearing on the issue of assignments.  In making its determination, the court explained:
“we are not unmindful of the concerns that [the insurer] expressed in support of its policy change, providing evidence that inflated or fraudulent post-loss claims filed by remediation companies exceeded by thirty percent comparable services; that policy holders may sign away their rights without understanding the implications; and that a ‘cottage industry’ of ‘vendors, contractors and attorneys’ exists that use the ‘assignment of benefits and the threat of litigation’ to ‘extract higher  payment form insurers.’  These concerns, however are matter of policy that we are ill-suited to address…[which] are more properly addressed to the Legislature.”
Now what?
Insurers, consumer protection groups, state agencies and - with the additional lightening of wallets resulting from the approved rate hikes - insureds are all affected by the AOB crisis in Florida.  Legislative efforts to address the AOB problem have failed.  Senate Bill 596, filed October 21, 2015, died in judiciary on March 11, 2016.  That same day House Bill 1097, filed January 4, 2016, died in the Regulatory Affairs Committee.
With the recent change of the guard from Kevin McCarty (retired May 2, 2016) to David Altmaier, as Insurance Commissioner, a watch for change begins.  The Commissioner acts as both a regulator and consumer watchdog, and takes the heat if insurance rates go up.  As the new Insurance Commissioner, Altmaier will have his hands full with this growing problem right out of the gate as he steps into a state of emergency caused by AOB abuse.

Tuesday, October 11, 2016

Recreational Marine Claims in the Wake of Hurricane Matthew

On Saturday, the deadly Hurricane Matthew made landfall in South Carolina. Matthew punished the southeastern states with heavy rain, winds, and record-breaking flooding in North Carolina. Thousands of people remain displaced from their homes, and tragically, to date, thirty-four Americans have lost their lives in the storm.
Many in the marine industry are familiar with dramatic post-loss photographs of recreational boats impaled on pilings or crashed onto land after being swept up by a storm surge. There is no doubt that many boats have incurred damage as a result of Hurricane Matthew, whether they were flipped, sunk, battered against docks and pilings, or carried ashore. Even educated boat owners who took recommended precautions, such as moving their boat ashore and having it anchored, may have suffered potential total losses due to significant structural damage.
Physical damage to the vessels themselves are not the only recreational marine claims that can be expected from this storm. Liability claims are also likely. Consider the claims that can be made against the owner when their boat did get carried ashore, if the result is damage to the property of others. Many recreational boat policies provide liability coverage that pays damages for property damage an owner-insured is legally responsible for, arising out of the ownership, maintenance, or use of their boat. But what if that damage could have been avoided had the boat owner took proper precautions before Matthew hit? That boat owner could risk a possible denial of coverage, as well as uninsured liability for the damage caused.
Hurricane-damaged boats have also been known to cause oil spills. Fuel spills and the resulting clean-up costs may be covered by liability provisions in marine policies. “Accidental fuel spill” usually means the sudden and accidental discharge, spillage, or leakage of fuel, oil, or lubricants required for the normal operation and use of the boat. A question could be raised, however, as to whether a spill resulting from an expected storm is accidental, if precautions were not taken.
Following Superstorm Sandy, a record-breaking number of recreational boats were reported damaged. Of those damaged, however, only about half were reportedly insured. One would hope that boat owners learned a lesson from that experience. Current estimates anticipate Hurricane Matthew damage claims to exceed $4-6 billion. For marine insurers, the full extent of claims arising from Matthew remains to be seen, but will likely involve hull, equipment, and liability coverage.

Wednesday, October 5, 2016

The National Hurricane Center’s Assembly Line of Information

As we continue to track Hurricane Matthew, Tropical Storm Nicole and any other weather event that manifests, it helps to understand the roles of the various organizations behind the forecasts and weather data that we rely upon. 
The purpose of the National Hurricane Center (NHC) is to save lives, mitigate property loss, and improve economic efficiency by issuing the best watches, warnings, forecasts, and analyses of hazardous tropical weather events and by increasing understanding of these hazards. When tropical storm or hurricane conditions are expected within 48 hours, the NHC issues watches and warnings providing updated data, forecasts and imagery that tracks the weather event’s movement throughout the affected area.  In order to provide the information to fulfill its purpose, the NHC relies on the collaboration of multiple units and subunits. 
The Hurricane Specialist Unit (HSU) is the watchdog of the operation keeping a close eye on tropical cyclones and areas of disturbances.   The HSU issues coastal tropical cyclone watches and warnings for the United States and its Caribbean territories.  The HSU also provides preparedness training and exaction to emergency managers and representatives.
The Tropical Analysis and Forecast Branch (TAFB) generates analyses and forecasts over the tropical and subtropical eastern North and South Pacific and the North Atlantic basins year-round. The TAFB supports the HSU by providing tropical cyclone position and intensity estimates.  The TAFB also provides satellite-based rainfall estimates for the international community.
The Technology & Science Branch (TSB) holds a pivotal role in the creation and further development of the Automated Tropical Cyclone Forecasting (ATCF) system, which is used to incorporate various data and model outputs and to generate tropical cyclone forecasts. In addition, TSB maintains a number of statistical and dynamical models used in predicting both tropical cyclone behavior and associated weather conditions.
The Storm Surge Unit, which is part of the Technology & Science Branch, forecasts the abnormal rise in sea level accompanying tropical cyclones using the Sea, Lake, and Overland Surges from Hurricanes (SLOSH) computer model. The Storm Surge Unit prepares storm surge atlases for use by emergency managers in developing evacuation procedures for coastal areas.
The Chief, Aerial Reconnaissance Coordination, All Hurricanes (CARCAH) unit is a remote operating location of the 53rd Weather Reconnaissance Squadron (Hurricane Hunters). CARCAH's mission is to coordinate all tropical cyclone operational reconnaissance in accordance with the National Hurricane Operations Plan. CARCAH also play an integral role in gathering intelligence associated with winter events in support of the National Winter Storms Operations Plan.  CARCAH carries out missions in advance of the high-impact weather events forecasted to affect the U.S.
The Hurricane Liaison Team (HLT), comprised of emergency managers and NWS meteorologists and hydrologists, is tasked with the quick, accurate dissemination of information among the NHC, the National Weather Service (NOAA/NWS), and the emergency management community. These communications address the progress and threat level of storms with affected Federal, state, and local officials by video and/or teleconferences with the NHC, FEMA and other Federal agencies, state Emergency Operations Centers (EOCs), Weather Prediction Center (WPC), Storm Prediction Center (SPC), and River Forecast Centers (RFCs).
The news updates, radar data, and multi-day forecasts that forewarn target areas allowing time for preparations, evacuations and risk management, are the result of the National Hurricane Center’s assembly line of information. 

HOPE FOR THE BEST, BUT PREPARE FOR THE WORST: Knowing The Potential for Property Damage in the Advent of Hurricane Matthew

Hurricane Matthew is making its way through the Caribbean towards the eastern seaboard of the United States less than 60 days before the end of the 2016 Atlantic Hurricane Season.  As we continue to track Hurricane Matthew in the possible advent of U.S. landfall, several local authorities have been activated in Florida and other U.S. coastal states. 
During an emergency preparedness press conference on October 3, 2016, Florida Governor Rick Scott announced, “Hurricane Matthew is a life-threatening category four hurricane and we must all take it seriously. If Hurricane Matthew directly impacts Florida, there could be massive destruction which we haven’t seen since Hurricane Andrew devastated Miami-Dade County in 1992. That is why we cannot delay and must prepare for direct impact now. Today, I signed an Executive Order declaring a State of Emergency in every Florida county to ensure we have resources for evacuations, sheltering and other logistical needs across our state. We are preparing for the worst, but hoping for the best and we will not take any chances to ensure our state is prepared.”
As local, state, and federal authorities release updated information throughout the course of this week, it is important to understand the impact of this storm and how it may affect public safety and property risk management.  Even if Hurricane Matthew does not make landfall, the wind projections are sufficiently elevated to anticipate severe property damage in the outlying portions of the storm.  As illustrated in the graphic below, as of 5 am this morning, Advisory No. 29 reports that the entire eastern coast of Florida is under a tropical storm and hurricane warning/watch.
According to the National Hurricane Center (NHC) and National Oceanic and Atmospheric Administration (NOAA), the above graphic shows an approximate representation of coastal areas under a hurricane warning (red), hurricane watch (pink), tropical storm warning (blue), and tropical storm watch (yellow). The white dot indicates the current position of the center of the tropical cyclone, and the dashed line shows the history of its center. Understanding the difference between National Weather Service watches and warnings is critical to being prepared for Hurricane Matthew or other any dangerous weather hazard. 
The National Weather Service issued “watch” lets you know that weather conditions are favorable for a hazard to occur. A “warning” designation means a weather hazard is imminent - it is either occurring or it is about to occur at any moment. Additionally, the issuance of an “extreme wind warning” indicates that sustained winds of a major hurricane (115 mph or greater), usually associated with the eyewall, are expected to begin within an hour in the designated area.
While there is no substitute for the professional analysis of engineering and climatological experts with regard to the effects of storm force winds, a general understanding of the Saffir-Simpson Hurricane Wind Scale is helpful in comprehending the implications of a warning designation in the context of anticipating the potential for devastation.  The Saffir-Simpson Hurricane Wind Scale (a 1 to 5 rating based on a hurricane's sustained wind speed) estimates potential property damage. Hurricanes reaching Category 3 and higher are considered major hurricanes because of their potential for significant loss of life and damage. Category 1 and 2 storms are still dangerous, however, and require preventative measures.

An animated illustration of the various scales of damage is available for observation here.
As Hurricane Matthew heads toward the Bahamas and makes its projected westward turn toward the Florida coastline, its strength should be monitored and preparations undertaken to handle the insurance claims arising from the probable trail of destruction that it is expected to leave behind.   

Tuesday, October 4, 2016

Cal OES Issues Earthquake Advisory Notice for Southern California

Late last week, the California Governor’s Office of Emergency Services issued an Earthquake Advisory notice directing the public to prepare for an increased probability of earthquakes over through October 7. 
The Advisory was unusual and was issued following the observation of an “earthquake swarm” near Bombay Beach, California, that started on Sept. 26, 2016, beneath the Salton Sea, which lies near the southern end of the San Andreas Fault.  The initial earthquake swarm was made up of almost 100 earthquakes, including three exceeding magnitudes of 4.0 on the Richter scale.  
On September 27, the U.S. Geological Survey announced preliminary calculations showing that there was up to a 1 in 100 chance of a magnitude 7 or greater earthquake occurring on the southern San Andreas Fault through October 4.  The USGS subsequently revised these calculations on September 30 to indicate up to a 1 in 500 chance of such an earthquake through October 7.  The probability revisions corresponded to a decrease in earthquake swarm activity. These estimates are made using the Uniform California Earthquake Rupture Forecast model (UCERF3), combined with the most recent probability modeling of the likelihood that an earthquake aftershock could be larger than its 4.0+ magnitude mainshock.
The initial Advisory was issued the same day that California Governor Jerry Brown signed legislation designed to advance the development of the earthquake early warning system in California.  In 2013, California previously enacted legislation mandating the creation of an earthquake warning system led by Cal OES in concert with the California Integrated Seismic Network, the USGS and others in both the private and public sector. The legislation signed on September 29 of this year, SB 438, establishes the California Earthquake Early Warning Program and Advisory Board within the California Governor's Office of Emergency Services to advance the implementation of the program and to encourage further investment in the early warning system.
Though the 1% risk of a 7.0 quake was ultimately downgraded to a 0.2% risk, the Director of the Cal OES took the opportunity to remind Californians of the need to be prepared.  “California is earthquake country. We must always be prepared and not let our guard down,” said Mark Ghilarducci. “The threat of an earthquake on the San Andreas Fault hasn’t gone away, so this is another important opportunity for us to revisit our emergency plans and learn what steps you need to take if a significant earthquake hits.”
The risk of a San Andreas-based earthquake causing catastrophic losses hardly needs explanation to even the most casual reader.  Both the 1906 San Francisco earthquake and the 1989 Loma Prieta earthquake were caused by movement along the San Andreas Fault.  Beyond the loss of life, the loss of real and personal property, public infrastructure, and related economic losses added up to billions upon billions of dollars.
More recently, the USGS predicted that a magnitude 7.8 earthquake along the southern San Andreas Fault, an event consistent with the Cal OES Advisory issued last week, could cause about 1,800 deaths and substantially more than $200 billion in property and economic losses.
While an early warning system might only provide a handful of seconds advance notice of an earthquake, even such a tiny amount of time could save lives and vast sums in property and economic losses.   Mexico and Japan have invested in early warning systems and related automated safety/loss mitigation systems that have delivered positive results.
With experts predicting the risk of “the next big one” to be on the rise, it would appear that we will have the opportunity to evaluate the effectiveness of California’s investments in its early warning systems sometime in the not-so-distant future. 
Posted by Matt Gollinger