Despite making landfall as just a Category 2-strength storm, Hurricane Ike's wind and storm surge has caused massive destruction along the Texas and Louisiana coasts, and the storm continues to cause claims to be filed as far away as the Midwest.

According to a report from Guy Carpenter, the center of Ike hit Galveston Island, Texas, at 7 a.m. local time last Saturday, Sept. 13, with wind speeds of 110 mph. One of the storm's biggest predicted threats had been its storm surge, which the National Hurricane Center said could be more than 25 feet due to the large size of the storm. However, according to a report from risk modeling firm AIR Worldwide, the surge failed to reach that height, instead topping out at the 13-foot mark. That was still enough for it to overflow flood walls and barriers, though, causing significant flooding damage to Galveston.

“Waves have been crashing over the seawall, and flooding has been reported across Galveston Island, including in the city's downtown,” said Dr. Peter Dailey, director of atmospheric science at AIR Worldwide, in a release. “Both the east and west ends of Galveston Island are reported to be under water. AIR estimates that the total value of insured properties on Galveston Island alone is about $12 billion, divided roughly equally between commercial and residential construction.”

As many policyholders learned after Hurricane Katrina, flooding caused by storm surges isn't usually covered by insurers. The typical policy wording for most insurers is similar to that found in the exclusions section of Insurance Services Office's Homeowners 3 Form, Section I:

“We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area…. 3. Water Damage. Water damage means: a. Flood, surface water, waves, tidal water, overflow of a body of water or spray from any of these, whether or not driven by wind; b. Water or water-borne material that backs up through sewers or drains or that overflows or is discharged from a sump, sump pump, or related equipment; or c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool, or other structure; caused by or resulting from human or animal forces or any act of nature. Direct loss by fire, explosion, or theft resulting from water damage is covered.”

Despite the extensive flooding losses, it is evident that Ike's winds will result in a high number of residential and commercial insurance claims, keeping catastrophe adjusters busy for months to come.

Guy Carpenter's summary report indicated that the day after Ike's landfall, much of the city of Houston remained without power, meaning some 2.4 million in the Houston area were stuck in the dark. This fact will also contribute to a high number of business interruption claims. Additionally, the report stated that high winds had blown-out the windows of many high-rise commercial buildings in Houston.

Ike also caused heavy rainfall and strong winds as it continued through the midsection of the U.S. The states of Illinois, Indiana, Missouri, Ohio, Tennessee, Kentucky and Arkansas reported extensive flood damage and power outages, spawned from the heavy rains and winds, and several people across these states were killed in drowning or wind-related incidents. At present, sources have said that the number of fatalities attributed to Ike in the U.S. has risen to 30 people in eight states, stretching from the hurricane-pounded Gulf Coast to the storm-battered Midwest.

More as it becomes available.

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Ike Spreads Devastation Across Country

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