Natural disasters have already caused a major impact on many different areas so far this year. The year began with a string of tornadoes across Texas, Oklahoma, and Louisiana. In February, Winter Storm Uri ravaged Texas, and, as summer began, wildfires and major heatwaves caused turmoil in the west. While these major weather events have stricken a variety of different areas, a new study shows that over half of U.S. properties are threatened by natural disasters.
Nearly 60% of American Structures Are Threatened by Natural Disasters
When a natural disaster strikes an area, the direct impact of it is typically not felt by those outside of the immediate area. A new study published by the American Geophysical Union, however, has shown almost 60% of properties in the U.S. are threatened by natural disasters, such as floods, earthquakes, tornadoes, wildfires, and hurricanes.
Researchers believe this dangerous trend is due in part to the risky development of structures and land use changes. While weather changes do pose some risk, property losses could be increasing due to the way cities and other urban areas are developed.
In the study, researchers produced maps of earthquake, flood, hurricane, tornado, and wildfire hazards and compared them to a specialized dataset of historical land use from Zillow—a database of popular online real estate marketplaces. Researchers then mapped out where the likelihood or magnitude of a natural disaster event fell within the top ten percent and identified natural hazard hotspots.
According to the researchers, development patterns drive exposure to natural disasters and loss, and having more detailed mapping can improve national-scale risk assessments. The study works to fill in this gap by exploring various changes in hazard exposure across the nation for multiple weather events over long periods.
The findings showed 57% of the structures in the contiguous U.S. are in natural disaster hotspots, with roughly 1.5 million structures located in hotspots of two or more natural disasters and/or hazards. Additionally, the number of threatened structures is slowly increasing despite a national development slowdown over the last decade.
Those involved in the study also linked regional development patterns to various hazard risks. For instance, an increase in commercial buildings and residential areas being built in cities or suburbs that are already largely developed correlated to increased vulnerability to hurricanes and earthquakes. Researchers believe local decision makers could use the study’s methods and data to improve risk assessments and better understand the socioeconomic variables that potentially increase the risk of exposure to neighborhoods and communities in heavily developed areas.
While the full impact of how overdevelopment increases the susceptibility of structures to property damage caused by natural disasters is not known, the study offers insight into what could happen if this kind of development continues over time.
Commercial Property Insurance and Natural Disasters
When a natural disaster happens, commercial property insurance can sometimes be a lifeline for business owners whose properties have been directly impacted. Commercial property insurance works to help cover the physical assets of a business, including the location itself, for damages caused by fire, theft, and storms, among other causes. While additional coverage may be needed for property not directly attached to the insured building, like commercial vehicles, the physical assets that are most often covered can include:
Construction costs, if necessary
While most of these items can be covered under a commercial property policy, it’s important that business owners don’t assume every natural disaster will trigger coverage. For instance, property insurance policies usually exclude coverage for flood damage. Meaning that if a hurricane occurs and flood damage is present, it will likely not be covered under a standard commercial policy. To ensure a commercial property has adequate insurance coverage in the event of a flood, business owners will need to purchase a separate flood policy through the National Flood Insurance Program.
In addition to flood damage, damage caused by an earthquake is also generally not covered under a standard property insurance policy. While Texans don’t often have to worry about their businesses being damaged by an earthquake, if a business has other properties in earthquake-prone areas like California, it will need to purchase additional coverage through a commercial property earthquake endorsement.
If a commercial property owner is unsure as to whether or not their business has the right coverage in place, they should consult with legal counsel. Having the advice of a knowledgeable property coverage attorney can provide peace of mind should the worst occur.
Commercial Property Coverage Attorneys
At Raizner Law, we are well versed in handling complex commercial insurance claims disputes and can help business owners get back to work. Contact us today to see how we can assist you.