Insurance For Hawaii Natural Disasters Wednesday, August 26 1
Moderator Webinar Topics • Hurricane: Todd Tamori • Earthquake: Justin Salgado Flood: Corina Hill • Kimberli Sakamoto • Q&A: Shane Choi Senior Sales Account Manager ksakamoto@atlasinsurance.com 2
Housekeeping Rules LISTEN MODE ONLY FOR QUESTIONS WILL BE ADDRESSED SUBMIT ALL QUESTIONS VIA THE PARTICIPANTS AT THE END DURING Q&A CHAT FUNCTION Please contact infohawaii@atlasinsurance.com for any individual personal policy questions 3
Hurricane Insurance Todd Tamori Personal Lines Sales Manager Email: ttamori@atlasinsurance.com 4
When is Hurricane Season? Hawaii Hurricane Season runs from the beginning of June to the end of November 5
Hawaii Hurricane Damage Hurricane Iwa (1982) Hurricane Iniki (1992) Hurricane Iselle (2014) 6
Hurricane Categories 7
Distinguishing Coverage Home Hurricane Insurance Insurance 8
Window of Hurricane Coverage Hurricane Hurricane 72 Hours After Warning Lifted Warning Issued Warning Lifted Hurricane Insurance coverage is applicable for wind damage that occurs from the time a Hurricane warning has been implemented through 72 hours from the time the warning is lifted. 9
Insurance Rating Factors What are the main factors that determine how much hurricane insurance cost? • Year Built • Construction type – Superior frame: Wood frame homes built 1994 and newer as there was a change in the building code to require hurricane clips and straps. • Property Location 10
Carrier Variance Single family home in Ewa Beach with $500k Dwelling coverage Framing Type Carrier A Carrier B Carrier C Superior Frame $420 $415 $410 Double Wall $729 $962 $915 Single Wall $892 $1,841 $1,589 Single family home in Honolulu at higher elevation with $500k Dwelling coverage Framing Type Carrier A Carrier B Carrier C Superior Frame $5,224 $521 $521 Double Wall $9,077 $1,006 $915 Single Wall $11,327 $1,841 $1,589 11
Hurricane Tips For You And Your Clients • Know your carrier! – Rating factors – Combined Home and Hurricane policy or Standalone Hurricane policy Financial stability – • Know your coverage! – Optional coverage (Other Structures, Personal Property, Loss of Use) – The value of Economic Demand Surge Todd Tamori Personal Lines Sales Mana ger Email: ttamori@atlasinsurance.com 12
Hurricane Tips Timing of supply and demand Economic Demand Surge: The increase in the cost of building materials and labor to rebuild the Dwelling Building and/or Other Structures due to an increase in demand in the event of a covered loss. 13
Earthquake Insurance Justin Salgado Personal Lines Sales Account Manager Email: jsalgado@atlasinsurance.com 14
Earthquake Insurance What is an Earthquake? “A sudden and violent shaking of the ground, sometimes causing great destruction, as a result of movements within the earth's crust or volcanic action.” 15
• Volcanic: Magma movement within and eruptions from presently active volcanoes in Hawaii (Kilauea, Mauna Loa, Hualalai, Haleakala and Lo’ihi) 16
• Tectonic: Earthquakes involving slippage along tectonic faults. Minor to moderate earthquakes occur on upper crustal faults beneath and within volcanoes. • Large Flank earthquakes occur along the decollement fault which separates the ancient oceanic • crust and the overlying volcanoes. 17
• Mantle: Flexing or bending of the earths crust and upper mantle, known as the lithosphere, due to the weight of the islands above. 18
Earthquakes in Hawaii: • Thousands of earthquakes occur every year in the State of Hawaii. • Most are so small that they can only be detected by sensitive instruments, known as seismometers. • Some are strong enough to be felt on one or more of the islands. A few earthquakes are large enough to cause significant damage and impact residents across the State. • Since 1868, more than 30 magnitude of 6.0 or greater earthquakes have rattled the islands 19
In 2006 , Hawaii was struck with a magnitude of 6.7 • It produced several aftershocks, including one that measured a magnitude of 6.1 seven minutes after the • main shock. The most severe damage caused by the earthquake was focused on the north and western sides of the island • of Hawaii. Damage was also quite heavy on the eastern side of Maui, and minor damage spread all the way out to western Oahu, 170 miles away from the earthquake's epicenter. On the Big Island, many houses had large cracks and broken windows, and at least 61 buildings were • destroyed and red-tagged by officials. Almost all houses in west Hawaii reported extensive internal damage but most avoided significant structural damage, the reason being that most of the buildings in the area around the epicenter of the earthquake have been built in the last few decades and are well constructed. Even so, over $200 million in damage occurred. 20
Do I need earthquake insurance? The probability of a destructive • magnitude-6.5 or higher earthquake striking the Hawaiian islands: … in the next 10 years is 50%. … • in the next 20 years is 75%. … • in the next 50 years is 97%. • Source: USGS Bulletin 2006 (http://pubs.er.usgs.gov/publication/b2006) So… It’s not IF a destructive earthquake will strike Hawaii, but WHEN the next one will happen 21
Earthquake Insurance Good option to consider for Big • Island clients. It does not cover any residual effect • like tsunami or volcanic eruption. 22
Earthquake Insurance covers damage caused by the specific event of earth • movement. We have a couple of options for earthquake coverage. A stand-alone policy, with a • starting premium of $1,000 or by endorsement with ICat Hurricane coverage, which is a much more favorable • premium. ➢ Matches limits from companion Hurricane policy ➢ % Deductible ➢ Paid as an Annual Aggregate Justin Salgado Personal Lines Sales Account Mana ger Email: jsalgado@atlasinsurance.com 23
Earthquake Insurance Maui Dwelling A = $500,000 with 2% Deductible Frame Type Lahaina Hana Single Wall $135 $135 Double Wall $100 $100 Superior $100 $100 Masonry $190 $190 Hawaii Dwelling A = $500,000 with 2% Deductible Frame Type Kona Pahoa Single Wall $702 $702 Double Wall $520 $520 Superior $520 $520 Masonry $988 $988 24
Flood Insurance Corina Hill Personal Lines Senior Sales Account Mana ger Email: chill@atlasinsurance.com 25
Flood Insurance Definition of Flood: a. A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more neighboring properties (at least one of which is your property) from: (1) Overflow of inland or tidal waters; (2) Unusual and rapid accumulation or runoff of surface waters from any source; or (3) “Mudflow”; or b. Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves of water exceeding anticipated cyclical levels that result in a “flood” as defined in a.(1) above. 26
Flood Insurance- Flood zones and their definition The most hazardous flood zones are V (usually first-row, beach-front properties) and A (usually, but not always, properties near water) V Zones According to FEMA and the NFIP, any building located in • an A or V zone is considered to be in a Special Flood Hazard Area, and is lower than the base flood elevation. V zones are the most hazardous of the Special Flood Hazard Areas. V zones generally include the first row of beachfront properties. The hazards in these areas are increased because of wave velocity - hence the V designation. A Zones A zones - the next most volatile of the Special Flood • Hazard Areas - are subject to rising waters and are usually near a lake, river, stream or other body of water. A-zone maps also include AE, AH, AO, AR and A99 designations, all having the same rates. The different A zones are named depending on the way in which they might be flooded Other Zones X zones are minimal-risk areas where flood insurance is • not mandatory. D zones are areas that have not been studied, but • where flooding is possible. 27
Ka loko Reservoir 2006 Flood Insurance November 2000 Hilo flood 28
Flood Insurance How much damage can 1 inch of flooding cause (on average) to a home? Per FEMA, $27,000 80% of claims filed with FEMA are from X zone properties A new, nationwide flood modeling tool is now available. Research combined existing flood models of sea-level rise and river flooding with simulations of extreme weather events and peer-reviewed projections into a single nationwide flood assessment model This new combined model estimates that over 14 million homes and other buildings throughout the country face a 1 percent annual risk of flooding, about 1 in 10 such real property parcels countrywide. This figure is projected to grow during the next 20 years. In contrast, only 8.7 million properties are identified as high- risk properties in the FEMA flood maps. This new model reinforces what we have known all along — far too many homes across this country perilously lack flood insurance 29
Flood Guard vs. FEMA/NFIP 30
Private Flood Market: Flood Guard 31
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