Texas Winter Storm: A Wake-Up Call for State Disaster Preparedness

The Unprecedented Cost of the Texas Winter Storm

Last month's winter storm in Texas, which resulted in dozens of deaths, millions without power, and nearly 15 million with water issues, is poised to become the costliest disaster in state history. According to disaster-modeling firm AIR Worldwide, the insured losses are likely to exceed $10 billion, with average claims severity values of $15,000 for residential risks and $30,000 for commercial risks.

Impact Across All Regions of Texas

The winter storm affected every region of Texas, with all 254 counties impacted in some way. This widespread scale and claims volume could drive ultimate insured losses as high as $20 billion, according to FitchRatings. For context, the state's insured losses related to Hurricane Harvey were about $20 billion. The Texas Department of Insurance reported that the deadly 2017 hurricane devastated the Gulf Coast region.

Preparing for the Future: Lessons from Texas

The Texas winter storm serves as a salient data point for all states and municipalities in their disaster planning. FEMA has proposed revising the "estimated cost of assistance" factor to more accurately assess the disaster response capabilities of states. This could mean states and municipalities will need to shoulder more of the cost of recovering from natural catastrophes. As Texas and other affected states recover, they still have 2021's severe convective storm and hurricane seasons ahead of them.

For readers, it is crucial to stay informed about disaster preparedness and insurance coverage. Documenting damage and keeping receipts for repairs can be beneficial when filing claims with insurers. Additionally, understanding the potential impact of climate change on extreme weather events can help in making informed decisions about insurance and disaster planning.