CoreLogic: Serious Delinquency Rates Triple in Recent Disaster Areas
CoreLogic, Irvine, Calif., released its annual Natural Hazard Report, saying communities affected by wildfire, hurricanes, tornadoes, earthquakes and other natural disasters in 2019 will likely experience an increase in mortgage delinquency rates, taking 12 or more months before normalizing to pre-disaster rates.
The report said 2019 marked the seventh year in the past decade in which 10 or more weather and climate disasters exceeding $1 billion have occurred.
The report also noted after 2017’s trio of Hurricanes – Harvey, Irma, Maria – serious delinquency rates on home mortgages tripled in the Houston, Texas, and Cape Coral, Florida, metropolitan areas and quadrupled in San Juan, Puerto Rico. The Tubbs Fire in 2017 and Camp Fire in 2018 caused serious delinquency rates to spike by more than 50% in the Santa Rosa and Chico metro areas of California.
“While 2019 was not the most catastrophic year to-date, it demonstrated a continuing trend of higher losses,” said Tom Larsen, CoreLogic Principal of Industry Solutions. “Affected communities experience an ensuing ripple effect from natural disasters, which is why continuously improving the data and analytics surrounding these catastrophes is so important in making our society more resilient. Understanding the past is critical to contending with the risk of the future.”
Catastrophic and extreme weather events in 2019 examined in the report include:
Tornadoes
• In 2019, the Dayton, Ohio tornado event resulted in an estimated 30,000 insurance claims worth $450 million to $480 million in insured losses, making it the third-costliest weather event in Ohio’s history.
• The Dallas tornado, an EF3, impacted nearly 10,000 structures, disrupting the business and livelihoods of countless residents and causing more than 150,000 customers to lose power. This resulted in what the Insurance Council of Texas “conservatively” estimated at $2 billion in insured losses.
Hurricanes
• The Inter-American Development Bank estimates the total cost of Hurricane Dorian on the Bahamas to be $3.4 billion. This, in conjunction with the $750 million from the prior hurricane seasons, means that in the past five years, $4.25 billion in losses were incurred via hurricanes in the Bahamas—more than one-third of the $12 billion gross domestic product of the region.
Wildfire
• The report noted U.S. wildfire activity in 2019 did not continue the two-year trend of near record-setting wildfire acreage. Still 4.268 million acres were burned by wildfire, compared to more than 8.5 million acres in each of the previous two years. The 2019 total is only 67% of the annual average of 6.9 million acres over the past 10 years.
Flooding
• When Hurricane Barry made landfall in Louisiana, it put 74,000 housing units at risk of flooding.
• Typhoon Hagibis resulted in more than three feet of precipitation within a 24-hour period, flooding more than 1,000 cities and prompting the government to order the evacuation of almost 8 million people.
• Given flood is not an automatically insured peril in Japan, it is estimated that at least 30% of all flood damage was uninsured, indicating the responsibility for repairs fell to the property owner.
