Hurricane Sandy impacts US East Coast

On 29 October, hurricane Sandy slammed into the New Jersey coastline, leaving behind an unprecedented level of devastation. Sandy was the most destructive hurricane encountered in the northeastern USA since the great storm of 1938.


Hurricane Sandy was the second last hurricane of the 2012 season. It began as Tropical Depression 18 in the central Caribbean on 22 October, then became a tropical storm that strengthened as it moved north, reaching hurricane intensity and passing over Jamaica on 24 October with winds of 130 km/h (80 mph). Sandy then intensified, with sustained winds of 175 km/h (110 mph), before making landfall next morning in Cuba, as a strong category 2 storm on the Saffir-Simpson hurricane damage potential scale. After weakening slightly, the hurricane passed over the Bahamas and then, on 27 October, turned firstly northeast ahead of a strong cold front approaching the eastern United States, and then back to the northwest. Sandy made its final landfall at 8 p.m. local time on 29 October on the North American continent near Atlantic City, New Jersey, with sustained winds of 130 km/h (80 mph).

Meteorological conditions

Among the most unusual aspects of Hurricane Sandy were its northwestward motion before landfall in New Jersey and the vast size of its wind field, which covered an area of 1.5 million km2 (560,000 square miles). Both features were caused by Sandy interacting with other low-pressure systems, highlighting the impact of extratropical transition.

Over half of all Atlantic tropical cyclones undergo extratropical transition, a process in which a tropical cyclone’s structure changes from a warm-core to a cold-core system. Hurricane Sandy went through two distinct periods of extratropical transition, leading it to be dubbed a “Frankenstorm” or “Superstorm” by the US media. The first started as Sandy exited Cuba, as shear and dry air from an upper-level low disrupted its core. The storm’s wind field broadened substantially, and frontal features started to develop. Sandy began to regain some of its tropical characteristics as it moved north of the Bahamas, away from this low. It then went through another period of extratropical transition as it began to interact with a large area of low pressure over the USA a couple of days later. This time, Sandy completed its transition and became fully extratropical just before landfall. Sandy’s two periods of extratropical transition are also probably one of main reasons why the hurricane’s wind field grew to near-record size.

On 29 October, hurricane Sandy slammed into the New Jersey coastline, leaving behind an unprecedented level of devastation. Sandy was the most destructive hurricane encountered in the northeastern USA since the great storm of 1938. © Munich Re
Hurricane Sandy's wind field

The second feature, Sandy’s northwestward motion before landfall, was caused by its transition to an extratropical storm and a phenomenon known as the Fujiwhara effect: two low-pressure systems sufficiently close to one another rotate counter-clockwise around each other (in the northern hemisphere), and are slowly drawn together. Occasionally, the two systems merge to form a larger, single circulation. This is what occurred with Sandy in the 24 hours before landfall, as the hurricane and low pressure to its southwest began to interact and rotate around each other, pushing Sandy back to the west before the two systems eventually merged into a very large extratropical cyclone just off the coast of New Jersey.

Comparison with the 1938 Great New England Hurricane

Due to the magnitude of loss, Sandy will inevitably be compared to the Great New England hurricane of 1938. Due to the limited observational data in the 1930s, it is not possible to accurately compare all aspects of the two storms. However, the similarities between the two storms include undergoing extratropical transition, large storm surges that occurred near high tide, similar minimum central pressures, and a large wind field that penetrated deep inland.

Aside from landfall location, the 1938 hurricane was a much more intense storm at landfall than Sandy. If the hurricane of 1938 had occurred today, it would probably cause significantly more damage than Hurricane Sandy. The New England hurricane had reached Saffir-Simpson category 5 intensity while north of the Bahamas and, although it weakened before landfall, its rapid forward motion of 100 km/h (60 mph) limited the amount of weakening and added significantly to the wind speeds on the right-hand side of the storm.

In the 1938 storm, sustained winds in excess of 200 km/h (120 mph) and gusts above 290 km/h (180 mph) were observed. In Sandy, only a few observing stations had sustained winds above hurricane force, and maximum wind gusts only reached 180 km/h (110 mph). Since wind damage increases exponentially in relationship to wind speed, the 1938 storm was much more potent than Sandy. Similarly, storm surge heights with the 1938 hurricane are estimated to have reached 10 metres (30 feet), about twice the maximum surge heights seen with Sandy.

Nevertheless, some aspects of Sandy had a greater potential to cause large losses. Sandy’s landfall was located along the New Jersey and New York coastline, a more densely populated area than Long Island, the location of the 1938 landfall. It also put New York City on the stronger side of the storm’s circulation, increasing loss potentials. Sandy’s path and large wind field also allowed for a much larger area of coastline to be impacted by surge flooding than during the 1938 storm, especially around the New York Bight, where Sandy’s persistent easterly winds funnelled water into New York Harbor and reached record levels. Sandy’s extensive wind field produced losses from Indiana to Nova Scotia, a distance of over 1,600 km (1,000 miles), far exceeding the area that sustained damage in the 1938 hurricane.

Underwriting aspects

As with all US hurricanes, as a result of Sandy, insurers and reinsurers will examine and, where necessary, revise their underwriting and models, bearing in mind the following points in particular:

In the aftermath of unprecedented losses from Hurricane Andrew in 1992, insurance companies that wrote business in Florida began to institute hurricane deductibles in their policies. Usually expressed as a percentage of the property value, hurricane deductibles are typically several times larger than a standard fire deductible. The implementation of hurricane deductibles accomplished two goals desired by both insurers and state governments. The first was to help reduce the cost of insurance to homeowners by making them pay a larger share of the loss for rare, but potentially severe, hurricane events. The second was to partially mitigate the amount of loss incurred by insurers due to hurricanes, as insured losses from Hurricane Andrew led to the insolvency of 11 insurance companies. Since then, hurricane deductibles have gained wider acceptance by the industry and regulatory agencies and have been implemented by insurers in 18 different hurricane-exposed states.

However, hurricane deductibles have not worked exactly as anticipated by the insurance industry. The first reason for this is that the trigger for a hurricane deductible can be based on many different storm and geographic metrics that can vary by state. Hurricane deductible triggers could be tied to wind speeds, watches and warnings issued by the National Hurricane Center, Saffir-Simpson Scale category, or whether the storm has been “named” by a government agency. In some cases, hurricane deductibles only apply if certain storm criteria are met and the hurricane makes landfall over the state in question.

Furthermore, in some states the department of insurance determines what combination of criteria triggers the hurricane deductible, while other states allow individual insurance companies to determine their own triggers. The different criteria in each state can lead to situations where citizens of one state have to pay hurricane deductibles and citizens of another do not, even if both states experience hurricane-force winds, diminishing their effectiveness.

The second reason why hurricane deductibles have not worked as expected is that state governments may not allow their application in situations where there is uncertainty about a storm’s intensity or status as a tropical cyclone at landfall. For example, Hurricane Irene’s (2011) intensity dropped below hurricane status just before its transit of New Jersey, New York, and Connecticut. As a result, the governments of these states did not permit the application of hurricane deductibles for this event. In the case of Hurricane Sandy, the National Hurricane Center reported that the storm had become “post-tropical” just prior to landfall in New Jersey. Even though the storm produced hurricane-force winds over the state, Sandy’s reclassification enabled New Jersey and other states to prohibit the use of hurricane deductibles for the event.

As seen after Irene and Sandy, state governments will often prevent hurricane deductibles from taking effect in cases where a storm’s status as a “hurricane” is uncertain at landfall. However, many insurers and reinsurers typically model hurricane risk using the assumption that hurricane deductibles will be triggered, even in borderline category 1 events or in the case of extratropical transition. Since this is not always the case in reality, it means that actual losses to insurers from events like Irene and Sandy end up being higher than anticipated. In light of this, the insurance industry will probably reconsider the modelling assumptions to reflect the fact the hurricane deductibles may not be applicable for all events.