Severe Tropical Cyclone Ingrid toyed with the northern Australian coast from 6 to 17 March 2005. Cyclones with winds in excess of 117kph are classified as "severe" and this was the only severe tropical cyclone in recorded history to impact the coast of three different States or Territories of Australia.
In Queensland it fortunately avoided local towns when it crossed Cape York Peninsula. In the Northern Territory some damage to property was reported along the Arnhem Land coast. Six pearl ships were sunk or damaged. Ingrid caused widespread tree defoliation and significant storm tides on the east coast. In Western Australia, Ingrid flattened an isolated echo tourist "Faraway Bay" resort.
Australia is no stranger to cyclones. Tracy devastated Darwin on Christmas Eve 1974. A cyclone caused widespread property damage on the Gold Coast in 1954 with an associated storm surge lodging boats in trees in Beachmere. In 1918 a cyclone caused substantial wind damage and flooding to property in Mackay. A witness reported seeing 2.7 metre waves breaking in the town centre. In February 1911, a cyclone caused significant damage in Port Douglas. 
The world has since been witness to news reports on the devastation of Hurricane Katrina and Rita which followed.
The sight of mass evacuations of millions of people across a wide area of south eastern America seems more the stuff of fiction than fact.
So what is the difference between a hurricane and a cyclone? Our research suggests the answer is location. Severe tropical storms such as these are referred to as hurricanes when they occur near the Americas in the Atlantic or eastern Pacific Oceans and cyclones when they form in the South Pacific and Indian Oceans. Nations in East Asia like Japan and China call them typhoons.
They spin clockwise in the southern hemisphere and anticlockwise in the northern hemisphere.
Katrina’s winds at landfall were clocked at 225kph. It was classified as a category 5 hurricane whilst in the Gulf of Mexico and was downgraded to a category 4 before it hit the coast.
Rita’s winds at landfall were recorded at 190kph. Like Katrina it entered the Gulf of Mexico as a category 5 hurricane. In fact, it is recorded as the severest cyclone ever to have entered the Gulf with winds peeking at 280kph. Thankfully it downgraded to a category 3 by landfall. It had a significant impact on oil refineries and delayed the re-occupation of New Orleans.
The Mark IV Industrial Special Risks policy (applicable in Australia) covers all risks unless excluded. Wind destruction is certainly not excluded. However, it excludes damage from action of sea, tidal wave or high water. If property escapes damage from the destructive wind and rainfall but is inundated with water from an associated storm tide or high water would the damage be covered
This is one of the problems which had to be addressed in the USA.
The Insurance Information Institute in the USA reports that a typical business policy covers damage due to wind but flood damage is usually excluded (or very limited) unless a separate policy has been taken.
Not only will complications arise in property losses. Business Interruption policies generally cover the loss of profit as a direct result of the insured property loss. Business Interruption losses will be sustained due to hurricane damage but, particularly with Katrina in New Orleans, the period of interruption may become extended due to (a) flood damage and (b) the depopulation of the area. The ongoing loss of profit from both these causes may not be considered to be a direct result of the insured property damage i.e. the wind and rain damage. Other complications will also arise as some businesses may have temporarily shutdown during the evacuation but may have escaped damage. Without property damage the Business Interruption policy may not respond.
So much devastation, so much to consider.
Author
Published with permission of Claim Solutions Pty Ltd.
Insurance Policy
Country: - Australia
Policy Description: - Various policies may apply
Insurer: - Various
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