Tornado Alley Whirling Toward Ohio

According to NOAA’s Storm Prediction Center, the U.S. has witnessed a significant surge in tornadoes, surpassing the historical average of 626 tornadoes in the same period over the last 15 years. This increase can be attributed to various factors, including climate change and improved detection methods, which have led to more accurate reporting.

Ohio, in particular, has been impacted by extreme weather this year. From January to June 2024, the state experienced 62 preliminary tornadoes, underscoring the extreme weather patterns.

Notably the term ‘Preliminary’ in the report refers to storm reports issued shortly after an event, with the best available data until the ‘Final’ report is published, which is the officially published Storm Data. This distinction underscores the evolving nature of tornado data, necessitating continuous monitoring and understanding.

Of the 1,208 tornadoes nationwide in 2024, NOAA also indicates the F-Scale that categorizes each tornado by intensity and area. An example is a possible EF2+, with winds ranging from 111 mph to 135 mph or higher on the Enhanced Fujita Scale. These tornadoes classified on the scale have the potential to cause considerable damage and pose a serious threat to human life and property.

Most of this year’s tornadoes have touched down in Iowa, Nebraska, Kansas, Texas, and Ohio, which is east of the traditional Tornado Alley. Refer to the National Tornado, Wind, and Hail Chart for detailed numbers from January to June 2024. See how many tornadoes are currently impacting your area using NOAA’s Storm Prediction Center.

Binding Authority and Weather Restrictions: These weather-related events can affect an agent’s ability to bind, increase existing coverage, and place coverage. It’s essential to review your Agency/Carrier Contracts to verify your binding authority and be aware of any limitations or weather restrictions. If the National Weather Service issues a severe thunderstorm, tornado warning, tropical storm, or hurricane watch or warning for an area within a certain mile radius of the risk location, a moratorium may be put in place. This means new business cannot be written, insureds can’t make changes that increase coverage or decrease deductibles, and this is done to mitigate possible fraud. Failing to review these contracts could lead to unforeseen issues for your agency and customers. Ensure you understand your scope of authority with all your carriers to avoid such risks.

Challenges in the Insurance Industry: One of the most significant challenges for insurance professionals today is the mounting impact of extreme weather events in traditionally disaster-prone areas. In 2023 alone, the U.S. saw a record-breaking $92.9 billion in weather-related damages, reshaping the industry and necessitating a fundamental reassessment of risk management strategies. The housing market has taken the brunt of evolving weather patterns, with climate change, inflation, and supply chain issues driving up damage and repair costs. This has increased home insurance premiums, making it more challenging for homeowners to secure adequate coverage and resulting in more costly claims for damage to their homes.

The Hard Market: Insurance professionals should brace for hard market conditions poised to reach new regions and further alter the insurance industry. Rising premiums, reduced capacity, and stricter underwriting standards present unique challenges for insurers, prompting the reevaluation of risk exposure and pricing strategies. Millions of properties across the U.S. are experiencing non-renewals and carrier withdrawals, especially those in newly deemed high-risk areas, including the Midwest. As of September 2023, 35.6 million real estate properties in the U.S. had encountered reduced coverage and skyrocketing insurance costs due to high climate risks. Homeowners who have previously not had to worry about non-renewals or carriers pulling out of their area are left with a lot of uncertainty and questions about their next steps.

Personalized Guidance: Education and advice are not just important; they are crucial. Recent data shows that over 70% of customers prefer to speak with an agent or representative when dealing with insurance issues. This underscores the need for personalized guidance and genuine dialogue on insurance intricacies, market dynamics, and coverage requirements. The human touch remains invaluable despite the rise of digital platforms, as consumers seek live conversations to navigate complex insurance decisions. Whether assisting clients with new policies or navigating renewals, insurance professionals must leverage their industry expertise to help clients understand and secure optimal terms and coverage. It is paramount to assume the role of a trusted advisor, providing the expertise and guidance individuals need to make informed decisions about their insurance coverage.

Improving Severe Windstorm and Tornado Risk: As business owners and nonprofit leaders, you hold a significant responsibility towards your staff, clients, and community. Most of the United States is at some risk for severe wind and tornadoes, not just in Tornado Alley. A good Disaster Plan allows you to focus on recovery and service, not searching for critical data or piecing together tools to work. Make sure the final document is easy to find by everyone on staff, from any location. Download the ACT Disaster Plan & Planning Resources along with the ACT Risk Assessment.

It is important to understand your risk, develop preparedness and mitigation plans, and take action such as the Ready Business Severe Wind & Tornado Toolkit. By doing so, you not only increase the safety of your employees and customers but also demonstrate your commitment to remaining in business after disasters such as tornadoes strike. Maintaining business continuity is not just essential for you, but it also plays a vital role in improving your community’s ability to recover.

By implementing the Ready Business Program as part of your overall business continuity planning, you’re making a strategic move that can protect your assets and sustain your capability to provide goods and services. Maintaining cash flow preserves your competitive advantage and reputation, and meets your legal, regulatory, financial, and contractual obligations. Experts estimate that 75 percent of businesses need continuity planning to succeed within three years of a disaster. The Ready Business Program, with its reliable resources from the Federal Emergency Management Agency (FEMA) Business Continuity Plan, can be your key to not just surviving, but thriving after a disaster, can be your key to not just surviving but thriving after a disaster.

Conclusion: As weather events become more frequent and severe due to climate change, insurers must continuously innovate and explore preventative processes and strategies, such as incentivizing homeowners to harden their homes to mitigate risks effectively. In turn, homeowners will better protect their homes and communities, reduce risk to life, and reduce the likelihood of catastrophic damage to their properties and businesses.

For insurance providers, it’s vital to harness robust data inputs and forward-thinking technology. This will not only support the development of risk mitigation practices that protect their customers but also foster resilience in the face of a changing climate. Taking this proactive approach, insurers can play a significant role in shaping the future of risk management.

An innovative approach will better prepare us to meet the challenges of tomorrow’s insurance landscape and safeguard the assets of those who need it most. While reassessing climate risk is necessary, it’s equally important to adapt and modernize customer experiences. This is not just a suggestion; it’s a step towards achieving balance within the evolving insurance landscape and the larger economy.

Legal Disclaimer: This material is intended to provide you with general background and insight. The material does not constitute, and should not be regarded as, legal advice regarding any particular facts, circumstances, or issues. This material is not intended to serve as a substitute for legal counsel, and we advise you to contact legal counsel for specific analysis, drafting, and advice.

More Information: Seek your trusted advisors—attorney, banker, and CPA—to ensure that your legal and financial interests are adequately protected. The information provided in this publication is not intended to be a substitute for legal advice. You should consult your legal counsel and make certain that you comply with state law. These laws and rules are subject to change. If you have more questions about this guide, you can contact OIA at (800) 555-1742 for the most up-to-date information.

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