Nebraska ranks 5th in losses from natural catastrophes in 2013

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Posted: Thursday, January 16, 2014 12:00 am | Updated: 11:11 am, Tue Mar 25, 2014.

Recent warmer days allowed some Omaha-area roofing companies to continue to repair damage from an intense thunderstorm last April — jobs that likely will extend into this spring and summer. Damage to thousands of homes from the storm's hail and high winds make up a big piece of the $773 million in property insurance claims from disasters last year in Nebraska. The industry estimate ranks Nebraska fifth among the states in losses from natural catastrophes in 2013.

Storms also caused the bulk of the damage nationally and internationally in a year when the total losses were below average.

Insurance experts say 2013's relatively light damage may be only a brief respite from a steady increase in the number and severity of weather disasters, both domestically and around the world.

In the United States, 121 natural disasters caused $21.8 billion in damage and 205 fatalities last year, with insurance covering $12.8 billion of that damage, according to Munich Reinsurance's American division.

Berkshire Hathaway Inc. of Omaha owns 11 percent of Munich Re and had $275 million in losses, after taxes, from natural disasters in the first nine months of 2013. Its insurance companies, including National Indemnity Co. of Omaha, sell coverage for property losses from disasters.

The 2013 insured losses are less than half the $29.4 billion annual average from 2000 to 2012. The main reason: For the first time in eight years, no hurricane-strength storms made landfall in the United States, the result of dry air and friendly prevailing winds.

In Nebraska, home repair companies went to work soon after storms on April 9-10 battered the Panhandle with a record wind-driven snowfall, blew apart roofs on the University of Nebraska at Kearney campus and damaged a wide swath of west Omaha neighborhoods.

Demand for repairs attracted a crowd of out-of-town companies alongside longtime Omaha businesses, said Malcolm Watt, owner of Hometown Roofing of Omaha.

“We tarped a ton of skylights,” Watt said. “The hail went right through them.”

Crews quickly repaired the damage that caused leaks, but some property with significant cosmetic damage — broken shingles and dented metal parts, especially — are still due for repair.

State Farm Mutual Insurance, which covers about one-fourth of the homes and autos in the state, had about 18,000 claims in Nebraska from the April 9-10 storms, about 11,000 for houses and 7,000 for autos.

If other insurance companies had similar experiences, that's more than 70,000 claims statewide, including 40,000 homes.

John Higgins of Weatherguard said his crews are working through repair orders from 30 west Omaha homes, and new calls still are coming in.

“We'll work year-round, but when the weather breaks we do whatever we can get done this time of year,” Higgins said. “These are bonus days.”

Most replacement roofs cost $15,000 to $25,000, he said, but some higher-end projects can run more than $200,000, counting gutters, skylights, vents, fittings and other materials.

“It was a big storm,” he said.

Eric Oberembt, vice president of D&M Roofing, said the “storm chasers” — roof repair companies from other cities — have mostly left Omaha, and some people with insurance claims are waiting until spring for repairs. Most insurance companies allow clients two years to complete repairs.

“They're going to start reaching back out to the local companies, is what I'm hoping,” Oberembt said. In some neighborhoods, nearly every house needs a new roof, he said.

Much of the damage was between 114th and 180th Streets, from the Douglas-Sarpy County line past State Street to the east side of Bennington.

Hailstones ranged up to 2 inches in diameter, enough to do significant damage, with the largest stones reported near Gretna and east of Bennington.

The Omaha storm added to the nation's $12.8 billion in insured damage last year, $10.3 billion of it from thunderstorms and related tornadoes.

Carl Hedde, head of risk accumulation for Munich Re, said 2013 recorded the lowest number of tornadoes in the United States since 2005 — slightly more than 900, compared with the long-term annual average of about 1,500.

Even so, the May storm and tornado that devastated Moore, Okla., was the sixth-costliest single thunderstorm on record, causing a loss of $3.1 billion, with $1.8 billion of the damage insured.

Hurricane damage last year was negligible, said Peter Hoppe, head of geographic risks research for Munich Re. Only storms named Ingrid and Humberto developed hurricane strength in 2013. They had the weakest rating for hurricanes and never made U.S. landfall.

Tropical storm Andrea was the only named storm to strike the U.S. Atlantic Coast.

That was the smallest number of North Atlantic hurricanes since 1982. In an average year, six hurricane-strength storms form in the North Atlantic, and the average has been eight since a warming phase began in the mid-1990s.

“But these are unpredictable, short-term phenomena, and the risk situation overall remains unchanged nonetheless,” Hoppe said, noting that there were an unusually large number of typhoons in the Pacific Ocean in 2013.

The average annual amount of insured damage has gone up five-fold since the early 1980s largely because of growing property wealth in the world and the increased use of insurance in developing and midlevel countries.

Partly because of 2013's relatively low claims, A.M. Best Co. said U.S. property insurance companies, as a whole, have plenty of money to pay future claims.

Robert Hartwig, president of the Insurance Information Institute, said the relatively low claims amount means the property-casualty industry should report higher income in 2013 than in 2012. Their combined net income through nine months totaled $43 billion.

A.M. Best has a negative outlook on the commercial insurance business because of low returns on investment given today's low interest rates. The industry should remain profitable, however, Best said. The reinsurance industry, which sells high-dollar coverage to retail insurers like State Farm, has a stable outlook, Best said.

Barclay's Capital Inc. downgraded its outlook for the property-casualty industry to neutral from positive because companies may not be able to increase prices to build profits and might end up lowering prices in mid-2014 to try to attract business.

The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.

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