Climate Change, Insurance and Tornadoes

There are those who listen to the nay-sayers about climate change. Some say that scientist are mistaken, and what they call climate change is nothing more than sun spots. Besides, it isn't good for business to be concerned with something that really does not exist.

Well, tell that to the insurance industry. Recent climate changes have caused more natural disasters with greater frequency than in our history, and the insurance industry is paying attention.

Earlier this year, I encouraged everyone I know to attend MATC's Green Energy Summit. If you didn't go, you missed some really interesting topics. Lindene Patton, Zurich Financial Services, was a keynote speaker on Thursday morning. (Zurich Financial Services is a reinsurance business that insures insurance companies. You may have heard about them since the tsunami that destroyed northern Japan.) Later in an afternoon session, Patton shared the results of a test conducted by the Insurance Institute for Business and Home Safety.

I learned that IBHS conducted a study where two identical homes were built with the exception that one was reinforced. The "reinforced" home had reinforcement of the roofing tiles, metal straps securing the roof structure to the inside walls, and the outside doors opened out not in. Next, they transported the homes indoors for a 100 mph wind tunnel test. The results of the test are in the video below.

Institute for Business & Home Safety Research Center from IBHS on Vimeo.

The home that was not reinforced was blown off its foundation. Not satisfied with the results, IBHS built ten more test homes in Galveston, Texas. After a hurricane, only six remained standing. The remaining four homes were damaged by buildings that were not reinforced.

Wow. So why don't we reinforce every home threatened by tornadoes and hurricanes? It costs money, and builders do not want the additional cost which is about 1% of the total cost of building the home. Building a $400,000 home would require an additional $4,000 using these techniques. So it is worth it? Maybe we should ask the families in New Berlin who were gathering their personal effects from neighbors miles away after the tornado in 1990.

According to homefacts.com, the largest Tornado in the New-Berlin Area was an F5 in 1990 that caused 350 injuries and 29 deaths. New-Berlin, Wisconsin has potential risk of tornadoes.

The good news is that these techniques can be applied to existing homes as well as new homes. April 11-15, 2011, is Tornado and Severe Weather Awareness Week in Wisconsin. What can you do about it? Plenty.