Analysis by catastrophe risk modeller CoreLogic estimates an overall loss from Hurricane Ida of between $27 billion and $40 billion, of which up to $21 billion could be covered by re/insurance protection.
The economic loss range from CoreLogic is for losses from wind, storm surge and inland flooding damages to residential and commercial properties in Louisiana, Mississippi, and Alabama.
The company estimates that the total insured flood loss for residential and commercial properties in these three regions will fall between $6 billion and $9 billion, which includes both storm surge and inland flooding.
The uninsured flood loss for this area is estimated at between $8 billion and $12 billion, which takes the estimated overall impact from flooding in the three regions to between $14 billion and $21 billion.
Additionally, CoreLogic estimates that insured wind losses from Hurricane Ida will be between $8 billion and $12 billion.
So, while economic losses are expected to be somewhere between $27 billion and $40 billion, insurance and reinsurance protection is expected to cover between $14 billion and $21 billion of the total loss across Louisiana, Mississippi, and Alabama.
At the top end of the ranges, re/insured losses would account for a little more than 50% of the economic loss.
CoreLogic states that over 90% of these losses are estimated to be in Louisiana, primarily in the nine parishes in the New Orleans-Metairie-Hammond metropolitan area and in the Ascension, Lafourche, Livingston and Terrebonne parishes immediately to the west.
Hurricane Ida made its first landfall on August 27th near La Columba, Cuba, with maximum sustained winds of 80mph. On August 29th, the storm made landfall near Port Fourchon, Louisiana, as a Category 4 hurricane with maximum sustained winds of 150mph.
Tom Larsen, principal, insurance solutions at CoreLogic, commented: “Hurricane Ida made landfall less than 40 miles away from where Hurricane Katrina made landfall, but the two storms had substantially different characteristics.
“Even though Hurricane Ida was a higher wind-speed Category storm at landfall, Hurricane Katrina had a much larger wind field and had spent many hours as a Category 5 hurricane before weakening during its approach to landfall. It brought much higher storm surge than Hurricane Ida and flooded 80% of New Orleans in addition to devastating the Mississippi coast. With climate change affecting the ocean’s temperatures, we should expect to see more frequent and destructive tropical cyclone activity. Homeowners and regional public agency leaders should prepare for more resilient city infrastructure and financial protection from catastrophe.”
Adding: “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.”