Lack of Hurricane Warnings May Help Homeowners

By Andrew Freedman

Silver linings post Hurricane Sandy have been hard to find. But the decision by the National Weather Service not to issue hurricane warnings north of North Carolina, and to instead declare Hurricane Sandy a “post-tropical cyclone” mere hours before landfall near Atlantic City on Oct. 29, may have significant ramifications for homeowners and insurance companies. In four hard-hit states — Connecticut, Maryland, New Jersey, and New York — the storm classification may save homeowners from having to pay costly hurricane insurance deductibles.

Coastal flooding in New Jersey viewed from a helicopter just after Hurricane Sandy struck the area.
Credit: New Jersey National Guard/Scott Anema.

The deductibles typically range from 1 to 5 percent of the covered value of a home. So, if a home is insured for $300,000, and there is a deductible of 5 percent, the homeowner would have to pay $15,000 before getting back any money from their insurance company.

Governors and insurance regulators in the four states have stated that hurricane deductibles will not apply in this case, in large part because the storm was not officially a hurricane with sustained winds of 74 mph or greater at landfall, and it did not prompt the Weather Service to issue hurricane warnings.

Hurricane Sandy is expected to be one of the top 10 costliest hurricanes on record in the U.S., with some total damage estimates rising to $50 billion. (Hurricane Katrina in 2005 ranks as the costliest hurricane to strike the U.S., costing more than $100 billion.) Therefore, for insurance companies, there is a lot at stake in the wake of this storm, including dealing with seemingly trivial differences in the title of storm warnings.

Connecticut law, for example, requires a hurricane warning to be issued for the state in order for the deductible to kick in. “The state moved very swiftly to alert the industry that this storm — although devastating to so many — did not meet the criteria for a hurricane deductible under state law,” said Connecticut Gov. Dannel P. Malloy in a press release.

State insurance regulators vet homeowners’ insurance policies and play a role in determining hurricane deductibles. Benjamin M. Lawsky, New York’s superintendent of financial services, said hurricane deductibles were not triggered in his state because the storm did not have sustained winds of hurricane force (74 mph or greater) when it hit the state.

Michael Barry of the Insurance Information Institute told Climate Central that Hurricane Sandy will likely force state insurance regulators and insurance companies to think about how to price the impacts of future high-impact, post-tropical storms like Sandy, even as meteorologists argue about the last one.

NWS’ Naming Dilemma

With Hurricane Sandy, the Weather Service faced a rare challenge — how do you warn people in a heavily populated area of a storm that would have all the impacts of a hurricane, yet was going to lack the structure of a true hurricane when it made landfall?

The main difference between a hurricane and a “post-tropical cyclone” has to do with the energy source from which the storm is drawing. Hurricanes draw their power from warm ocean waters, whereas post-tropical cyclones are energized by sharp temperature differences between air masses.

As Sandy moved up the East Coast, it gradually transitioned into a post-tropical storm as it interacted with a cold front, and that is what helped expand its wind field, and actually contributed to its much larger impacts than had it been a typical hurricane.

Aerial view from an NOAA aircraft of the damaged amusement park at Seaside Heights, N.J., following Hurricane Sandy.
Click to enlarge the image. Credit: NOAA.

What the National Hurricane Center (NHC), working with other NWS offices, chose to do was controversial within the meteorological community, and now it is likely to reverberate throughout the insurance industry.

The Hurricane Center chose not to issue any hurricane watches or warnings beyond North Carolina, even though many areas would see hurricane-force wind gusts. Instead, NHC allowed local NWS offices to issue an array of warnings ranging from high-wind warnings to coastal-flood warnings. Rick Knabb, the director of the NHC, told reporters that the decision was made in order to minimize confusion in the event that Sandy was reclassified as a post-tropical cyclone before making landfall, which would have required that all hurricane warnings be canceled, and other warnings to be issued instead.

“By using non-tropical warnings in these areas from the start, we avoid or minimize the significant confusion that could occur if the warning suite changed from tropical to non-tropical in the middle of the event,” NHC said in a statement.

The lack of hurricane warnings north of North Carolina was heavily criticized by TV meteorologists, who took to social media platforms to question the Weather Service’s decision.

Harvey Leonard, a TV meteorologist at WCVB-TV in Boston tweeted on Oct. 28, “For storm surge, ground zero will be Long Island, NY . . . inexcusable that there is not an official hurricane warning there.” Jim Cantore of The Weather Channel tweeted on Oct. 27, “I completely disagree with NHC not putting up Hurricane warnings for the northeast.” Later, Cantore said he wondered if New York City Mayor Michael Bloomberg’s initial decision not to order evacuations of low-lying areas would have been different had hurricane warnings been issued. Bloomberg eventually ordered mandatory evacuations ahead of the storm. 

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