According to Louisiana’s insurance commissioner, Jim Donelon, the odds that hurricane Isaac will have any impact on the premiums paid by residents of the state in order to cover their homes is very slim.
Donelon stated that it is now estimated that insured damage from Isaac will total $500 million to $1.5 billion.
Hurricane Katrina was by far the most costly in terms of homeowners insurance costs. It brought in a total of $25 billion in damages. Rita was next in line with a far smaller cost of $3.3 billion. Hurricane Gustav’s insured costs were approximat
ely $2.2 billion, according to Donelon.
The commissioner stated that homeowners insurance rates were not impacted by Gustav.
As that was a storm that brought in significantly higher damages, then this leaves him under the impression that Isaac also will not cause homeowners insurance premiums to increase. Donelon believes that the majority of the losses will be the result of damage from flooding.
Though claims are still coming in for damage from Hurricane Isaac, it is believed that the majority of them have already come in and agents are reporting that they have slowed down significantly from the main wave. Many are also stating that there had been notably fewer claims than were anticipated. There weren’t nearly as many as were made in previous severe storms.
According to State Farm spokesperson, Gary Stevens, that insurer received approximately 26,000 claims as a result of the damage from Isaac in Louisiana. Comparatively, the state received 80,000 claims as a result of Gustav’s damage. State Farm is the largest homeowners insurance provider in Louisiana.
Stevens explained that a great deal of the difference had to do with the wind speed and land speed of the storm. Apparently, the types of claims differed greatly from one policyholder to the next. He stated that the wind damage wasn’t up to the same degree as Gustav, which was considered to be a highly destructive weather event.
Local homeowners insurance companies have stated that they believe the smaller number of claims is the result of the hurricane deductible and the overall weakness of Isaac.
