The Effects of Watercraft Destruction in 2004 to the Insurance Market

During the hurricane season of 2004 there were four significant

hurricanes that made landfall and caused significant damage to the

watercraft industry. According to Cary Breese, ACAS president of Trafalgar

Marine Insurance Service, Inc., this was an extremely rare occurrence,

which was estimated to happen only once every 150 years. This estimate was

determined by placing the figure into a catastrophe modular. The

watercraft industry took a big hit, with damages estimated at approximately

$680 million. Due to extensive damage, insurance companies had to think

decisively about reinsuring many of their customers. In the Midwest United

States substantial damage was done to marinas due to snow. Since the

watercraft industry took such a hard hit in 2004 insurance companies are

hesitant to cover watercrafts and their marinas.

Larger insurance companies may have to increase their coverage cost

since they had to...