January 31, 2008 by
A recurrence of the 1998 Ice Storm today would result in total insured losses of between US$1 billion and US$3 billion — potentially twice the US$1.3- billion cost incurred in 1998, according to a retrospective report by Risk Management Solutions (RMS).
RMS released the report on the 10th anniversary of the storm that devastated portions of Ontario, Qubec and parts of the northeastern United States.
Potential damages from a 2008 recurrence of the storm fall into three categories:
• direct physical damage to automobile and property;
• additional living expenses; and
• refrigerator and freezer contents that may be lost as a result of prolonged power outages, a RMS statement says.
Although major improvements have been made to the Hydro-Qubec electrical power grid, an ice storm of this magnitude would still cause significant and lengthy power outages, the release adds.
“This storm demonstrates that direct physical damage from a catastrophic event may comprise only a minor percentage of the total insured losses,” said Robert Muir-Wood, chief research officer of RMS.
“Infrastructure disruptions such as power outages lead to costly business interruption losses for commercial and industrial properties, as well as additional living expenses for homeowners forced to evacuate their properties.”
However, since 1998, many homeowners and businesses have purchased generators and non-electrical stoves and heaters to ensure they would not have to evacuate in the event of a storm and incur additional living expenses or losses to their refrigerator and freezer contents, RMS adds. •