Global data analytics and technology provider Verisk, estimates industry insured losses to onshore property for Hurricane Otis, the strongest hurricane ever to hit Mexico, will likely fall from MXN 50 billion to MXN 110 billion (~USD 3 billion to 6 billion).
The industry loss range, according to Verisk, includes insured estimates of wind and precipitation-induced flood across Otis’s track. Most of the modelled loss is attributable to wind.
On October 22 Hurricane Otis made landfall as a Category 5 storm, with maximum sustained winds of 165 mph, over the greater Acapulco, Mexico, an oceanside resort city and the largest city in the Mexican state of Guerrero in terms of population and economics.
It is the strongest tropical cyclone on record to affect the state and surrounding area. In less than 24 hours, the storm rapidly intensified from a Cat 1 system to a major hurricane prior to landfall. Interaction with the mountainous terrain of southern Mexico quickly dissipated Otis as it moved inland.
Few wind measuring stations survived the storm and provided reliable data on wind speeds. One station near Acapulco that endured the storm recorded a peak wind gust of 135 mph.
Observations from aircraft as well as satellite data were used to help constrain the modelled windfield, Verisk noted. Maximum rainfall amounts along the coast generally fell between 8 and 12 inches, with a widespread 2+ inches across much of the state of Guerrero.
The coastline of Acapulco contains many larger apartments and condominium buildings as well as hotels. Due to Oti’s wind strength most of these buildings lost their windows, and many buildings near the coast also suffered roof damage.
Smaller commercial and residential buildings in Acapulco saw major damage as well, with cladding tossed from walls, roofs torn off and debris scattered, Verisk report noted.
Significant damage was also observed to the north and west of Acapulco. In Coyuca de Benitez, a city in the state of Guerrero, there was minor damage to a hospital as well as significant damage to residential structures observed.
Verisk highlighted: “Insurance take up for residential risks is quite low in Mexico, though a bit higher for commercial risks. However, it is likely there is higher residential insurance take up in Acapulco, particularly in direct coastal areas, than across the rest of the state of Guerrero.”
Losses to onshore residential, commercial and industrial properties and automobiles for their building, contents and time element coverage from wind and precipitation induced flood are included in Verisk’s insured loss estimate.
But the model does not consider a number of other losses, these include losses from coastal storm surge, from coastal storm surge, to infrastructure, and losses paid out by any sovereign or government protection programs, among others.
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