Hurricane Ida insured loss estimate nears $18 billion in the U.S.

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Hurricane Ida insured loss estimate nears $18 billion in the U.S.

The Category 4 storm caused significant structural damage and flooding in Louisiana, Mississippi, and Alabama.

New Orleans firefighters assess damages as they look through debris after a building collapsed from the effects of Hurricane Ida on Monday, Aug. 30, 2021, in New Orleans, La.

Early estimates from Karen Clark & Company (KCC) indicate that insured losses from Hurricane Ida will be near $18 billion in the U.S. and $40 million in the Caribbean, not including privately insured damage to residential, commercial and industrial properties, offshore properties, autos, boats or NFIP losses.

Ida made two landfalls on its course: first hitting Cuba on August 27 with maximum sustained winds of 80 mph and then making landfall as a Category 4 storm near Port Fourchon, La., on August 29 with maximum sustained winds of 150 mph. The timing of Ida’s impact on Louisiana landed on the 16th anniversary of Hurricane Katrina, the costliest storm in U.S. history.

According to KCC, the damage caused by Ida in Cuba and the Cayman Islands is limited to non-structural damage, downed trees and power outages. In Louisiana, coastal areas experienced significant structural damage to commercial and residential buildings from damaging winds, with low-level wind damage extending farther inland into southern Mississippi.

New Orleans saw strong hurricane-force winds that tore at awnings and ripped roof coverings from buildings. However, KCC noted that most of the structural damage reported is from older homes and businesses. Smaller levees southeast of New Orleans also were overtopped during the storm.

Flood losses in the billions

CoreLogic analysis released Sep. 1 places total insured flood loss for residential and commercial properties in Louisiana, Mississippi and Alabama at an estimated $6 billion to $9 billion, including storm surge and inland flooding damage. CoreLogic also estimates that insured and uninsured losses from wind, storm surge and inland flooding damages to residential and commercial properties in affected U.S. areas will be between $27 billion and $40 billion. More than 90% of all losses are expected to come from Louisiana.

“While only 40 to 50% of the flood damages from Hurricane Ida appear to be covered by insurance, this is actually an improvement from the uninsured flood damages we saw from Hurricanes Harvey and Katrina,” said Tom Larsen, principal, insurance solutions at CoreLogic, in a press release. “The flood insurance gap is shrinking.”

KCC reported that the peak storm surge from Hurricane Ida exceeded eight feet along the Louisiana coast. Lower levels of storm surge were seen from the central Louisiana coast to Mobile, Alabama.

According to CoreLogic data reported by The Insurance Information Institute (Triple-I), a storm surge from a Category 4 hurricane, such as Ida, could potentially affect 6.46 million single-family residential homes.

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