A recurrence of the 1938 Great New England Hurricane would produce more than $20 billion in insured losses in New York alone with today’s property values and rebuilding costs, according to a recent paper by Karen Clark & Company (KCC), a catastrophe risk modeller.
KCC warned that although New York does not face the same frequency or severity of events as more catastrophe-exposed regions such as Florida, the state is not immune to large losses.
The cat risk modeller noted that there is nearly $9 trillion of insured value in New York, including residential and commercial properties, with $6 trillion concentrated in coastal counties alone.
Although the Northeast has not experienced a major hurricane for many years, a single event could still cause significant losses given the state’s high population and exposure density.
Since 1850, eleven hurricanes have impacted New York, the most notable of which was the Great New England Hurricane of 1938.
On 21st September 1938, the Great New England Hurricane made landfall in Bellport, New York, as a Category 3 storm with estimated maximum sustained winds of 121 mph. It brought more than 15 feet of storm surge to Long Island and tracked inland, causing damage into Canada before transitioning to a post-tropical cyclone.
KCC estimates that if this storm were to occur today, it would result in around $20.5 billion in insured losses—the highest among the eleven events—and the second highest in total losses at $50 billion. Hurricane Donna is projected to cause the largest total losses at $61.1 billion, but only $4.6 billion in insured losses.
Meanwhile, Superstorm Sandy in 2012 caused almost $10 billion in insured losses in New York—more than half of the storm’s total losses—even though it was barely of hurricane intensity and made landfall in New Jersey. If it occurred today, it would cause $13.2 billion in insured losses (the second costliest) and $31 billion in total losses.
KCC noted that hurricane risk in New York—and along the entire US coastline—is changing due to a warming global climate. Current scientific consensus indicates that rising sea-surface temperatures are increasing hurricane intensity. This translates directly to a general shift toward stronger hurricanes that could threaten the Northeast.
A 100-year return period hurricane in the region would be a Category 3 hurricane with maximum winds of 121 mph, similar to the Great New England Hurricane. A lower probability event, such as a 250-year return period hurricane, would be more intense—a borderline Category 3/4 storm.
Beyond hurricanes, New York also faces significant impacts from both severe convective storms and winter storms, which together generate almost $1 billion in average annual property losses in the state.
KCC highlighted that exposure to catastrophe losses presents regulatory challenges. Ensuring property insurance remains both available and affordable—while preserving the insurer surplus needed to withstand major events—requires a forward-looking approach and careful consideration of multiple factors.
