Reinsurance News

Hurricane Laura storm surge threatens homes with RCV of $88.6bn: CoreLogic

25th August 2020 - Author: Luke Gallin

As Hurricane Laura continues its path toward the Louisiana coast, catastrophe risk modeller CoreLogic has warned that almost 432,000 single-family and multi-family homes along the Texas and Louisiana coasts are at potential risk of storm surge damage.

This analysis is based on Hurricane Laura making landfall as a Category 3 storm, threatening some 431,810 homes with a combined reconstruction value (RCV) of around $88.63 billion.

On Tuesday morning, Hurricane Laura strengthened to a Category 1 storm and the NOAA now expects the storm to reach Category 3 status at least as it approaches the Gulf Coast.

In preparation for Hurricane Laura’s landfall, which is expected either late Wednesday or early Thursday, evacuations have started in parts of Texas and Louisiana.

As of 16:00 BST, the NHC says that Laura has maximum sustained winds of 75mph, higher gusts and a minimum central pressure of 990 mb.

Tremor - The modern way to place reinsurance

hurricane laura track nhc

As noted by CoreLogic, as the storm approaches the coast, its path will become clearer and the areas at risk will narrow.

“The coincidence of two catastrophes—a damaging hurricane season and the ongoing global pandemic—underscores the importance of the correct valuation of reconstruction cost, one of the core tenets of property insurance,” said Tom Larsen, principal, insurance solutions at CoreLogic.

“Homeowners, mortgage lenders and insurers need to work together to ensure properties are fully protected and insured. CoreLogic data has found a correlation in mortgage delinquencies and catastrophes, which could point to a serious issue of underinsurance trends,” he added.

After the weakening of Hurricane Marco as it approached the Gulf Coast, re/insurers will be keeping a close eye on Hurricane Laura over the next 24 hours as it nears the coastline. The storm surge threat is significant and life threatening in numerous areas, with the NHC also warning of the potential for widespread flash and urban flooding.

CoreLogic says that it expects the 2020 Atlantic Hurricane season to remain on its current trend or above-average activity in light of warmer oceanic temperatures.

“Hurricane-driven storm surge can cause significant property damage when high winds and low pressure cause water to amass inside the storm, releasing a powerful rush over land when the hurricane moves onshore,” explains the firm.

Print Friendly, PDF & Email

Recent Reinsurance News