The Financial Impact of Hurricanes

The hurricane season has churned up two devastating hurricanes to date. These hurricanes – Harvey and Irma have resulted in damage to life and finances. The financial impact of hurricanes can easily be overcome over a period of time, but when a life is lost, there is nothing that can be done. These types of disasters remind us how fragile life is and how you can have everything in one minute and then nothing in another.

In less than a month, two massive and devastating hurricanes wreaked havoc on Texas and Louisiana were affected by Hurricane Harvey, whilst Barbuda, St. Maarten/ St. Maarten, Turks & Caicos, the British Virgin Islands in the Caribbean and Florida, South Carolina and Georgia in the United States were hard hit with the passage of Hurricane Irma. These countries have already started their relief efforts and will soon begin the task of rebuilding.

Psychologically, the impact of Hurricane Irma cannot be measured in dollars and cents or on any scale. It’s different for each person and people will react differently to events that occur. But, there is no easy way to get over the horrors of losing the things that you’ve worked hard to achieve.

When you’ve fled your home to escape an unpredictable tropical storm, you have no idea what you will come back to or if there will be anything to come back to. One storm survivor in Florida mentioned that the storm passing over the state was the easy part – the difficulty was figuring out how to deal with the aftermath.

Still, we must be grateful that many lives were spared and we must keep the families and friends of those who were lost, in our hearts, thoughts and prayers.

Financial Impact of Hurricanes

The financial impact of Hurricane Harvey and Hurricane Irma has gone well into the billions of dollars. However, these estimates are expected to rise when relief efforts are completed. But this could take months or even years before final figures are tallied. However, the financial impact is evident, especially in day to services that keep the economy going.

A very important question has been asked – what is the immediate financial impact of hurricanes? The impact is felt far beyond the stocks and investments and international trading markets. Sectors such as oil and fuel; travel and tourism; shipping and logistics; agriculture; health and transportation are only some of the sector casualties.

Oil and Fuel

Hurricane Harvey damaged some of the oil lines in the gulf which led to shortages in the region and the wider United States. Also, because of safety issues tankers were unable to service the country, which resulted in shortages and rationing of existing fuel resources. Customers felt the pinch when gas prices rose – there was a great demand but little supply.

Travel and Tourism

The financial impact of hurricanes is also detrimental to the travel and tourism industry which is a major money earner in the Caribbean and Florida. And the passage of hurricanes effectively disrupts air travel and cruise travel. Several airlines cancelled flights, airports and sea ports were closed and cruise ships stayed away from ports of call. In addition, the infrastructure damage harms the tourism product. And the longer recovery takes, the less money is being earned.

Shipping and Logistics

Extreme weather disasters can severely impact shipping and logistics of goods and services. When roads, air and sea ports and businesses are closed, goods and services cannot be received or provided as normal. These delays can affect how quickly the affected area is up and running. In the aftermath of Hurricane Harvey and Hurricane Irma, there have been shortages in everything, specifically water, food, cleaning products, toiletries, linens and clothing.

Agriculture

The agriculture sector was also affected by the passage of hurricanes. Livestock were displaced, injured and killed; farms and fields were destroyed and food crops and textile fibres such as cotton were wiped out. Farmers are having challenges reaching and providing food their animals and there were well founded concerns about disease and predators. These losses will result in food shortages and the prices of basic goods will increase.

Health

The health sector bears a large load with the occurrence of natural disasters. Hospitals were forced to evacuate, postpone and cancel medical procedures. Now, in the aftermath of the storms, hospitals are under enormous strain to help the sick and injured. There have been widespread shortages of medical supplies and medical staff.  There are also fears of epidemic outbreaks which could further cripple the medical systems. Mental health is also of great concern as people struggle to deal with losses and stress.

Transportation

Transportation services and schedules have also been interrupted by Hurricane Harvey and hurricane Irma. Many transportation facilities such as bus stations, railway stations and airport have been closed and/ or damaged. Services have been delayed or postponed indefinitely due to damaged vehicles and impassable and destroyed roads. Also, because many of the affected areas are still in disaster relief mode, travel for relief reasons is given priority first.

One can safely say that the financial impact of hurricanes travels far and wide and touches every sector that makes up the economy. Some people have already begun to question what they could have done differently to be better prepared.

Hurricanes and Home Insurance

To be honest, there is only so much one can do in the event of a hurricane. But there are some steps that can be taken to protect your home and contents from natural disasters. Home insurance can cover tropical storm damage, but many policies, depending on where you live, do not cover flood damage. In these cases, separate flood insurance policy has to be taken out for the home.

Your home insurance can make the difference in how you recover from a hurricane or tropical storm. Take the time to read the details of your insurance contract, paying close to what is covered under the policy and what is excluded from the policy. For example, your home insurance policy may cover tornado damage if you live in a tornado prone area.

Check your policy to see if it specifically covers damage caused by hurricanes. You should be looking for coverage for wind damage; hail damage; flooding; damage caused by fallen trees; windows that have been shattered; roofs and shingles that have been blown off and rain water damage if your home has been compromised.

You should also ask specific questions about how much damage your home is insured against. If you need $50,000 to repair your home due to hurricane damage, will you receive that full amount? You also need to have the insurance clarify if your contents are also covered and what is the coverage amount. Also, does the insurance cover external structures such as pools, decks, walk ways, storage sheds and landscape items? And, most importantly, if your home is inhabitable because of a storm, does the insurance cover relief housing until the repairs are completed?

In the aftermath of the storm, you will need to document the damage so that you can provide this information to the insurance company. Insure, a comprehensive source of consumer insurance information has listed the following claim tips which will be helpful as you prepare to file your claim after a hurricane or tropical storm:

  1. Document the damage with photos and video
  2. Use reasonable measures to prevent further damage from occurring from your property
  3. Immediately notify the insurance company of the loss and submit a claim
  4. Compile an inventory your personal possessions and property after the storm (the site recommends taking inventory before the storm hits)
  5. Document all conversations with insurance personnel and insurance contact information
  6. Secure written bids of labour and materials for repairs from licensed professional. Do not discard any of the damaged property until the insurance company has settled your claim
  7. Keep records off all repair expenses so that you can provide them to your insurance company.
  8. Don’t be afraid to negotiate with your insurer if you believe that you have not received a fair settlement.

How to Help Hurricane Victims

The financial impact of hurricanes can be even worse when certain situations occur. When disasters strike, unscrupulous humans, take advantage of the kindness of others to further their own twisted agendas. To combat this problem and to ensure that your donations are received by those who desperately need help, please contact the following organisations:

You should contact these agencies if you want to donate money, food, toiletries, shelter or if you want to volunteer your time.

References

For more information on the financial impact of hurricanes and tropical storms, please see the following articles:

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