OCC Forums

Tropical Storm insurance clauses


By alshaheen - 15 Mar 2012

Prior to Hurricanne Ivan in September 2004, most insurers had tropical storm exclusion clauses applicable to the supposed "hurricane season", generally July thru ' November, and to a "box" defined by latitude and longitude. Typically the southern limit was 12.5 degrees north. Ivan hit Grenada as a Category 5 storm (the first hurricane to hit Grenada for 28 years) and destroyed hundreds of boats stored there, almost all of them south of 12 deg N, and therefore fully insured! The insurers sustained enormous losses, panicked, and re-wrote their tropical storm clauses so that they would apply anywhere, anytime without limits. Seven years later, they appear to be relaxing. My insurers, Pantaenius, have just rewritten their Tropical Storm Clause to apply between 1 July and 15 November and to a newly defined "box ' defined as: 30.5 degrees North to 10 degrees N and 60 degrees W to 94 degrees W, excluding the Pacific. Note that the southern limit is now well south of Grenada and includes Trinidad and the N coast of Venezuela, where thousands of boats go for hurricane season storage. So, the new clause is an improvement on the "anywhere, anytime" situation but is nothing like as favourable as the pre Ivan clauses.