Hurricane insurance predictions place losses from Isaac at up to $1.5 billion

Hurricane Isaac

The storm brought severe wind and rains to many parts of several states.

When Isaac made landfall and then passed through New Orleans, it left a swath of onshore damages that current estimates are predicting to bring hurricane insurance losses of between $500 million and $1.5 billion.

This disaster modeling firm prediction applies to the losses in Louisiana alone.

Though Isaac wasn’t oneHurricane Isaac of the most damaging that the state – or the country – has seen, it still managed to wreak havoc to homeowners and businesses alike. It caused more than 644, 000 people to lose power throughout the states of Louisiana, Arkansas, Mississippi, and Alabama. Moreover, there were hundreds of residents that had to be rescued from the rooftops of their flooded homes.

There were many factors that went into the hurricane insurance loss estimates.

The catastrophe modeling firm that provided the estimates was Eqecat. It indicated that the onshore damage losses in Louisiana that was covered by policies were estimated at up to $1.5 billion based on damage to residential and commercial property, the production of energy, and the interruption of business. However, the estimate does not include most flooding.

The reason that flooding was not included in the firm’s estimates is that the federal government provides the hurricane insurance for that peril for the majority of properties within the state.

Off-shore energy production, alone, could bring about over $500 million in damages due to Isaac. The storm was a Category 1, and had winds that surpassed 80 miles per hour. That said, it was only tiny in comparison to the Category 3 storm of Hurricane Katrina, which brought winds of approximately 125 miles per hour. From that storm, $45 billion in private hurricane insurance damage occurred, not including the losses from flooding, according to the Insurance Information Institute.

That said, Isaac’s nature was comparable to the Category 2 storm called Gustav in 2008, which traveled along a similar path and brought around $2 billion in insured losses – not including flooding – to that zone. The economic damages from Isaac could cause the hurricane insurance claims to be higher than other Category 1 storms due to the fact that it spanned an enormous 200 miles and was travelling at only 10 miles per hour.

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