Friday, October 7, 2016

Will The Yacht Losses From Hurricane Matthew Be It's Most Catastrophic Financial Cost?

Most of us have an innate curiosity for natural disasters as long as we’re not caught in their crosshairs. They’re even more addictive these days because we can watch them unfold on television and online in real time.
While I was glued to the screen last night what I couldn’t stop thinking about were all of the yachts—some of them over 100’ in length and presumably worth millions of dollars—helplessly thrashing around in their marina slips, some destined to sink. Whenever a major natural disaster occurs whether it’s an earthquake, tornado, wildfire, or a hurricane, the quantifiable “losses” that you hear about in the news always seem to be measured in terms of real estate.

Water covers portions of International Speedway Boulevard in Daytona Beach after Hurricane Matthew passes through on October 7, 2016 in Daytona Beach, Florida. Drew Angerer/Getty Images
But when it comes to a massive Category 3-4 hurricane like Matthew that’s currently about to pound over six hundred miles of densely packed coastline from West Palm Beach, Florida to Wilmington, North Carolina with maximum sustained winds over 130-mph and storm surges up to 11’, what about the boat and marine losses?
How can the dollar exposure for all of the recreational yachts, docks, marinas, commercial fishing boats, and shipping facilities be quantified? And what’s the real exposure for the companies that insure all of this property in a potentially once-in-a-lifetime storm? More importantly, are underwriters even financially prepared in the first place?
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