Iowa insurers preparing for impact of Hurricane Sandy

CEDAR RAPIDS - Right now, it's prepare and wait for the claims staff of United Fire Group  in Cedar Rapids and Allied Insurance in Des Moines.

Cedar Rapids-based United Fire is poised to survey and record damage from Hurricane Sandy in several East Coast states. The company acquired customers in New Jersey, New York and Pennsylvania as part of its 2010 purchase of Mercer Insurance Group for $191 million.

"We have our storm team mobilized with travel plans made to arrive mid-week," said David Conner, vice president and chief claims officer at United Fire Group. "We've activated all of our internal cat (catastrophe) plan and the regional cat plan for our Pennington, N.J., office.

"We've already rolled the phones over because most of the states over there are on a state of emergency where travel is not advised. We've closed our Pennington office down and it may be closed again Tuesday and possibly Wednesday."

Conner said Hurricane Sandy is likely to cause catastrophic damage due to power outages and flooding, more than the wind problems typically associated with large storms.

"We're going to have our fair share of wind claims, but it won't be that big of a deal compared to the flooding and the shear number of people and businesses without power," Conner said. "The big question is how much damage it will due to forestall crews from getting power back up and going, and how much the storm surge is going to inundate those coastal areas and create flood problems."

Allied, owned by Nationwide Insurance, said its claim representatives and agents are prepared to assist customers that may be affected by Hurricane Sandy in the Northeast, Mid Atlantic and Midwest regions. Storm centers are being prepared and three Nationwide catastrophe response units are waiting in Harrisburg, Pa., for deployment to the most impacted areas.

Eqecat, a disaster-modeling company used by the industry to forecast storm exposure, said on Monday that Hurricane Sandy was likely to cause anywhere from $10 billion to $20 billion. That could top last year's Hurricane Irene, which cost $15.8 billion.

Nearly 284,000 homes, condominiums and apartment buildings valued at almost $88 billion are at risk for potential storm-surge damage among the Mid-Atlantic coastal states if the storm hits the coast as a Category 1 hurricane, according to CoreLogic of Irvine, Calif.

"This is a large, slow-moving, persistent and dangerous storm. Its impacts are going to be far-reaching and no doubt very costly," said Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions. "Sandy could pose an enormous threat to major metropolitan areas in the Northeast, from Virginia Beach and Washington, D.C. to New York City and Boston."

Hurricane storm-surge flooding can cause significant property damage when high winds and low pressure cause water to amass inside the storm, releasing a powerful rush over land when the hurricane moves on shore. The CoreLogic analysis measures damage from storm surge and does not include potential damage from wind and rain associated with hurricanes.