Iowa Derecho Could Cost $5 Billion in Insured Losses
The National Oceanic and Atmospheric Administration (NOAA) estimates damage from the derecho that slammed the Midwest on August 10 to be at $7.5 billion. No single thunderstorm event in modern times — not even a tornado — has wrought as much economic devastation as the derecho that slammed the nation’s Corn Belt on Aug. 10, based on analyses from the public and private sectors.
The manager of NOAA’s database of billion-dollar weather disasters said the agricultural impacts from the severe thunderstorm event are still being analyzed, so the total may be revised. Parts of five Iowa counties were struck by wind gusts estimated at 110 to 140 mph. The derecho caused four deaths, destroyed millions of acres of crops, severely damaged or destroyed hundreds of homes and toppled thousands of trees.
According to analysts at reinsurance broker Holborn Corporation, the Aug. 10 derecho event in Iowa could drive $5 billion of insured property losses.
“One could make a strong case that this is the most destructive individual thunderstorm cluster on record in terms of damage cost,” said Steve Bowen, head of catastrophe insight at the insurance broker Aon, in an email to the Washington Post. Aon released an initial damage estimate of $5 billion for the derecho, not yet including agricultural impacts.
A derecho is a widespread, long-lived, straight-line wind storm that is associated with a fast-moving group of severe thunderstorms, and which can potentially be as powerful as hurricane or tornado force winds. Analysts stated that catastrophe models will likely have to be recalibrated after this event, given that a derecho of this magnitude would only occur once in more than 1,000 years, based on current models.