By Emily Chang, catastrophe services manager, Temporary Accommodations
No matter where you are in the country, when extreme winter weather conditions arise, the impact can be devastating — triggering power outages, freezing pipes and dangerous, icy roads.
Texas residents experienced these conditions firsthand during the February 2021 deep freeze and they aren’t the only state navigating a challenging winter season again this year.
Many areas around the United States have already witnessed extreme winter weather conditions in 2022 — the Northeast and Midwest being hit particularly hard in recent weeks — and meteorologists anticipate more storms are on their way. As snow, sleet and freezing rain cover cities, the concern around potential power outages grows. The scenario is all too familiar for those in Texas recalling events of just a year ago, when winter storms rocked the property insurance industry. Significant damage resulted from a variety of issues following the storm. Most notably, several hundred thousand properties lost electricity. As a result, many homes became uninhabitable and countless people faced a shortage of both food and water. The broad impact of this event influenced insurers, governments and property owners in various ways — emphasizing the need for preventative measures.
The impact on insurers
The 2021 Texas freeze had a significant impact on insurers not because of the actual storm, but because of the power failure that followed. Since homeowners could not heat their homes, a high percentage ended up with frozen and broken pipes — leading to an unprecedented number of claims. It’s recommended that property owners regularly review their insurance policy to understand the response to this type of loss as many have a coverage cap applicable to losses resulting from a broken pipe.
Preventative action by state and local government
In response to last year’s freeze, the state and local governments instituted various bills to improve the power infrastructure in Texas. Among other things, these laws aimed to require that all power plants weatherize, institute an emergency alert system, and provide a loan plan for power companies. In addition, local communities continue to prioritize their own plans to help protect those most vulnerable in the event of a similar disaster.
Preparations for property owners
Property owners across the country can take steps to prepare for a potential freeze event by reviewing their insurance policy and verifying that the sublimit applicable to broken pipes is adequate based on potential losses. They should also understand whether their policy covers temporary housing expenses if their home becomes uninhabitable.
Preventative measures will help protect properties ahead of a deep freeze:
- Unhook any outdoor water hoses to faucets
- Wrap outdoor pipes and faucets with insulating material
- Open cabinet doors under sinks to provide warm air flow
- Circulate water by dripping at least one faucet
- Keep the temperature at 55 degrees or warmer inside
- Find the water shut-off valve before a deep freeze, and then if a leak occurs inside the building, shut off the water immediately to prevent further damage
- Additionally, consider creating a checklist of what you may need if you experience a power outage
Our team continues to monitor the potential for more winter storms across the country. To report claims, contact our CAT intake center for immediate setup and assignment. In addition to adjusting services, we offer repair solutions, temporary accommodations, building consulting, contents and inventory solutions, forensic advisory services and engineering to assist insurers and their policyholders. If you have questions or need assistance, please contact the Sedgwick property team or visit our website.