U.S. insured losses associated with wind and coastal flooding from Hurricane Nate, which struck the U.S. Gulf Coast as a category 1 storm on October 8th, are expected to reach a maximum $500 million, according to RMS estimates.
This estimate includes property damage and business interruption from wind and coastal flooding to residential, commercial, industrial, and automobile lines of business.
Fears that the storm would reach category 2 quickly lost power as the storm diminished to a tropical depression after making landfall in Mississippi before moving north into Alabama and towards Georgia with heavy rain.
Hurricane Nate’s $500 million in insured damages won’t substantially impact total U.S. insured loss figures for hurricanes this year, which are forecast to fall between $75 and $120 billion after three major hurricanes wreaked havoc on the U.S. East coast and coastal cities.
Tom Sabbatelli, senior product manager of the RMS North Atlantic Hurricane Models, said; “RMS’ industry loss estimate is expected to be lower than the losses projected prior to Nate’s landfall.
“Forecasts that projected the storm to strengthen to Category 2 intensity did not materialize and Nate ultimately made two landfalls as a Category 1 hurricane. None of the wind measurement stations analyzed by RMS recorded hurricane-force wind speeds at any point during the storm’s passage.”
The coastal flood losses include coverage leakage – an escalation in claims severity for wind-only policies in situations where wind and water hazards co-exist in residential lines of business.
However, it excludes losses related to inland flooding which are expected to have an insignificant impact on the hurricane’s total losses.
The $500 million insured loss figure doesn’t count losses to the National Flood Insurance Program (NFIP), and confirms estimates already released by catastrophe risk modeller Karen Clark & Company (KCC).