Assessment tool can help predict and mitigate losses due to damage
There’s no lack of stories in the news about severe weather and other natural phenomena that cause injury and damage to people, businesses and communities. Geography and climate are factors in predicting natural hazards such as hurricanes along the East Coast and earthquakes shaking up California. However, too often we see natural events affecting areas that aren’t always prepared to deal with the after effects.
Now there’s a tool that allows insurance carriers and citizens to predict and prepare for these natural disasters. CoreLogic has developed a method for measuring the who, why, what, where and when of natural hazard risk management. The Hazard Risk Score (HRS) from data collected on natural hazards that include wildfires, earthquakes, floods, tornados, hurricanes, hail, sinkholes, storm surges and straight-line winds.
The data is analyzed and a score between 0 and 100 is applied to each state to assess risk levels of damage from natural hazards. Scores indicate risk exposures at specific locations using probability of events and frequency of past events as factors in determining the risk levels of individual hazards. Also taken into account is how much each risk contributes to the total loss.
What the scores tell us
The five states that rank highest for multiple natural hazard risks are Rhode Island, Florida, Massachusetts, Louisiana, and California. Scoring lowest are West Virginia, North Dakota, Michigan and Vermont. Limited natural hazard risk data precluded Hawaii and Alaska from being scored. A full listing of state rankings is available on the CoreLogic website.
HRS takes consistent measures of risk concentration, accurately pinpointing the riskiest places in the country. This information helps in assessing risk management for potential natural hazard damage. CoreLogic suggest HRS scores can be used to make business decisions such as:
- continuity of business and planning for disaster recovery
- analyzing risks of specific properties
- determining savings through mitigation as opposed to potential damage from hazards
- determining potential risk of default for under or uninsured properties
- Identifying properties designated as “good risk.”
Source: “States Ranked by Risk of Damage from Natural Hazards: CoreLogic,” insurancjournal.com, 10 Sept. 2014.