Winter Storm Losses In Texas Drive ERCOT Subrogation Speculation (Artemis)

Winter Storm Losses In Texas Drive ERCOT Subrogation Speculation

  Thursday, March 11th, 2021 Source: Artemis

The size of the estimated winter storm insurance and reinsurance market loss from February’s severe Arctic freeze and the issues suffered by energy organisation the Electric Reliability Council of Texas, Inc. (ERCOT) has raised speculation over the chances of subrogation becoming a possibility for carriers.

Record freezing temperatures ended up driving significant issues across ERCOT’s power network and utilities in Texas, with the levels of demand for power unable to be met by any sources at the utilities disposal.

The result was millions of energy customers left without power and heating, which is expected to significantly exacerbate the insurance claims burden, particularly from freezing pipes and burst pipes in homes and businesses that were unable to be heated.

At one stage more than 4 million Texas homeowners were said to be without power during the freezing weather event and winter storms in February. ERCOT has also been blamed for regional infrastructure not enabling it to tap into energy from neighbouring states, further exacerbating the situation.

Lawyer Larry Bowman, a Director at Kane Russell Coleman Logan PC said that it has already, ‘Received several subrogation assignments arising from claims involving burst water and sprinkler piping. Other claims involve damage due to lack of heat to inventories and other property.’

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