Tool Calculates Natural Hazard Risk to Property

Potential for hurricanes and storm surges, the possibilities of wildfires and sinkholes, and an extensive coastline make Florida rank as the state with the highest risk of property damage from natural hazards, according to a new analysis by CoreLogic. Second on the list is Rhode Island, with Michigan coming in with the lowest ranking for risk.

The analysis was derived from the Hazard Risk Score (HRS), a new analytics tool that gathers data on multiple natural hazard risks and combines the data into a single score ranging from 0 to 100. The score indicates risk exposure at the individual property and location level, CoreLogic said. In calculating an overall score, the probability of an event and the frequency of past events are significant contributing factors to determine risk levels associated with individual hazards, along with each hazard’s risk contribution to total loss.

“Florida’s high level of risk is driven by the potential for hurricane winds and storm surge damage along its extensive Atlantic and Gulf coastline, as well as the added potential for sinkholes, flooding and wildfires. Michigan alternatively ranks low for most natural hazard risks, other than flooding,” Howard Botts, Ph.D., vice president and chief scientist for CoreLogic Spatial Solutions, said in a statement.

HRS measures risk concentration and pinpoints the riskiest places in the country. “This insight is critical in conducting comparative risk management nationwide and fully understanding exposure to potential natural hazard damage,” Botts said.

The tool can be used to improve decision-making and enhance business operations, including:

• Business continuity and disaster recovery planning

• Analyzing risks associated with properties

• Measuring savings of mitigation compared to the potential damage of a hazard

• Evaluating natural hazard levels of distribution and supplier networks

• Recognizing if underinsured or uninsured properties could be at risk of default

• Adverse selection avoidance and identification of good risk properties.




The Largest Natural Hazard Risks of 2012

2012 was a year of natural catastrophes. From Hurricane Sandy to the record-setting drought to the third most destructive wildfire season on record, the year was fraught with disasters that took a toll not only on communities nationwide, but on some of the world’s largest insurers. Today, CoreLogic issued its annual Natural Hazard Risk Summary, which details the most significant natural disasters that struck the United States in 2012. It notes the following:


  • The single most destructive natural disaster in 2012 was Hurricane Sandy. In late October, the Category 1 storm generated record levels of storm surge along the northern New Jersey coast and in the New York City area, impacting more than five million residents across the region.
  • The first hurricane to make landfall in the U.S. in 2012 was Category 1 Hurricane Isaac in late August, which caused an estimated $2 billion in insured losses around the New Orleans metro area.


  • Flood losses are expected to total approximately $10 billion in 2012, which would result in the third consecutive year of increasing flood damage in the U.S.
  • Earlier in the year, Tropical Storm Debby tracked slowly across the Florida peninsula in June, dropping at least 25 inches of rainfall along its path.
  • After months of sustained, widespread drought, Hurricane Isaac brought heavy rainfall and flooding to Louisiana in late August before continuing northward into the Midwest.


  • The 2012 wildfire season was the third most destructive on record in the U.S. in terms of total acres burned as of early December.
  • The 15-year trend of fewer, but larger fires continued into 2012 with fewer than 51,000 individual wildfires across the country—the lowest number recorded since 1989.
  • Several of the individual fires that occurred in 2012 set records, including Colorado’s Waldo Canyon Fire, which damaged or destroyed 346 homes, and New Mexico’s Whitewater-Baldy Fire, which burned more than 297,000 acres.
  • NOAA continues to predict a pattern of drought conditions through the start of 2013, suggesting the potential for another increase in wildfire risk across much of the country. In the chart below, “SL” stands for short-term drought (typically less than six months) and “L” stands for long-term drought (typically more than six months).


  • Tornado activity in 2012 was not strictly limited to the region commonly referred to as “Tornado Alley.” States located outside the central and southern Great Plains experienced a significant number of tornadoes this year. The chart below, from CoreLogic’s report, represents states with 30 or more tornadoes in 2012. States in orange are not typically considered part of “Tornado Alley.”
  • January 2012 was one of the most active Januaries since recording began in 1950, with a total of 79 tornadoes reported across the country.
  • In late February, tornadoes struck Illinois, Indiana, Kentucky and Ohio. Harrisburg, Ill., experienced the most concentrated destruction, with more than 225 homes and businesses damaged or destroyed and an estimated $475 million in total damage.

“Because the strength, severity and geographic impact of natural disaster events will change from year to year, an understanding of patterns in hazard activity, geographic vulnerabilities and the properties exposed to each different type of disaster is crucial to managing risk,” said Dr. Thomas Jeffery, senior hazard scientist for CoreLogic.

As we’ve seen with the natural catastrophes of 2012, it is important for insurers, homeowners and businesses to develop a more comprehensive evaluation of risk — one that includes typically non-traditional locations.

Storm Risk Reaches Well Beyond Tornado Alley

We’ve heard it over and over again: 2011 was the costliest year on record for natural disasters. From triple-digit heat waves and devastating drought to overflowing rivers and deadly tornadoes, the U.S. rang up natural disaster costs in the billions and much time and effort of rebuilding.

But what wasn’t talked about so much was the fact that much of the tornado risk was located outside of the traditionally storm prone tornado alley, according to a new report by CoreLogic. “The apparent increase in the number of incidents and shift in geographic distribution of losses that occurred last year in the U.S. called the long-held notion of risk concentration in Tornado Alley into question, and is leading to changes in risk management policy and procedure,” said Dr. Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions.

CoreLogic’s “Tornado and Hail Risk Beyond Tornado Alley” report analyzes hazard risk at the state-level across the U.S using the company’s wind and hail data layers. Key findings include:

  • Tornado risk actually extends across most of the eastern half of the U.S. rather than being confined to the Midwest
  • According to data from the National Oceanic and Atmospheric Association (NOAA), of the top ten states with the highest number of tornado touchdowns between 1980 and 2009, only three actually fell within Tornado Alley
  •  At least 26 states have some area facing extreme tornado risk
  • At least 11 states have significant areas facing extreme hail risk, and almost every state east of the Rocky Mountains has some area facing a moderate or higher level of hail risk
  • The area of highest hail risk extends outward from the central Great Plains to include states as far east as Georgia and the Carolinas

These findings have obvious insurance implications, but it goes beyond that to disaster preparation and natural catastrophe risk management in areas not historically prone to such events. CoreLogic released the maps below, indicating tornado peril in non-tornado alley states.

Insurers and residents alike should be aware of the high risk of tornadoes, wind and hail in these areas. For the complete report, including and in-depth descprition of how CoreLogic created the above maps, click here.