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Hurricane in Key West

The 2021 Atlantic Hurricane Season Outlook

Hurricane season officially began on June 1 and continues until November 30. At this point, we are well into the season, which NOAA predicted back in May would be “active.” NOAA expects a likely range of 13 to 20 named storms, of which 6 to 10 may become hurricanes, including 3 to 5 major hurricanes (category 3, 4, or 5) is expected. NOAA provides these ranges with a 70% confidence based on underlying weather conditions. We have had five named storms, one hurricane, and no major hurricanes so far during the 2021 season. If the NOAA predictions ring true, then much activity remains for 2021. In fact, September tends to be the most active month of hurricane season with as many named storms historically as both August and October combined.

 

2021 Hurricane Season Outlook

 

Impact on Property Insurance

Property damage from hurricanes directly influences the price we all pay for property insurance.  The insurance markets harden following years with a significant amount of property damage. For example, prior to 2017, the most property damage in a single year from weather events was in 2005 with $214.8 billion. The 2017 year saw property damage from weather events of $306.2 billion. Hurricane Harvey alone had total property damage costs of $125 billion, which was second only to Hurricane Katrina in 2005 at approximately $161 billion. Insurance companies must raise premiums in order to account for years where losses exceed their estimates.

 

Coastal Areas at Risk

In order to better alert homeowners to the increased potential for property damage, NOAA began to establish a list of areas most prone to damage from a hurricane each year. The below map identifies areas of the country most susceptible to damage from a hurricane. Notable locations at risk include Miami, FL, Cape Hatteras, N.C., San Juan, Puerto Rico, and New Orleans, LA. Real estate markets are tight in these markets in 2021.

The Covid-19 pandemic increased demand significantly for homes in coastal communities as many people desire warm communities with outdoor spaces. The increased demand in real estate has led to both increased home prices and an increased demand for construction work, further driving up home prices as well as renovation and restoration costs.

 

Hurricane Damage Density Chart
The probability that a named storm tropical storm or hurricane will affect a location at some point during hurricane season. Todd Kimberlain/AOML NOAA

 

Cost and Mitigation

Hurricanes cause significant property damage that costs both homeowners and insurers alike. Whether it is water and wind damage, hurricanes result in damage that often puts homeowners out of their homes for an extended period. As a result, homeowners need to take mitigation measures to minimize damages. A recent article identified hurricane-resistant building techniques and details how these help minimize hurricane damage. The below installation suggestions are helpful in new construction and remodels.

  1. House stilts
  2. Cement pilings
  3. Stormproof windows and doors
  4. Strong roof shingles
  5. Storm shutters
  6. Wind Resistance Techniques

Homeowners need to heed the warnings that the 2021 hurricane season is young. Based on NOAA’s predictions, it is likely that 2021 will still have at least a few major hurricanes. By taking basic precautions, homeowners can minimize both property damage and future premium increases.