AIR: Isaac Insured Losses Could Reach $2 Billion; Threats Remain

Catastrophe modeler AIR Worldwide says onshore insured losses from Hurricane Isaac could reach $2 billion.

The storm is now well-inland and has been downgraded to a tropical depression with winds of 35 mph as its rain begins to sop Arkansas and Missouri before the storm turns east.

AIR says the estimate of between $700 million and $2 billion includes insured losses from damage to residential, auto, commercial and industrial properties and contents, as well as additional living expenses and business interruption-related losses. It also takes into account demand surge.

Competitor Eqecat previously released an insured-loss estimate of between $500 million and $1.5 billion onshore. It adds estimated economic losses of between $500 million to $1 billion for offshore energy assets. AIR says it does not expect significant phyical damage to offshore oil rigs and platforms.

Much of the damages caused by Isaac is due to flooding—a peril not covered by a standard homeowners’ insurance policy whether flooding is caused by rain or storm surge.

Up to 25 inches of rain fell in some spots in Louisiana, where Isaac made landfall twice as a Category 1 hurricane and the modelers agree Isaac's storm surge levels, which eclipsed some floodwalls, were high for a storm of Category 1 strength.

The AIR estimate assumes a 10 percent take-up rate for commercial flood policies.

Additionally, “Isaac’s slow forward speed and refusal to dissipate will exacerbate wind damage,” says Tim Doggett, principal scientist at AIR.

Due to all the rain saturating the ground, trees can fall at lower wind speeds, he says. Roofs can become “fatigued and overloaded, causing additional damage,” as the wind persists, he adds.

Reported wind damage includes downed power lines and trees as well as some structures and items such as awnings, signage and trailers, AIR says.

More than half a million customers are still without power, according to reports from the local electric provider, Entergy.

Tornadoes spawned by the storm system remain a threat. Eqecat says nine tornadoes were reported in southern Mississippi and Alabama on August 29 and more were reported on Aug. 30.

 

Comments

Resource Center

View All »

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Personal Lines Pro eNewsletter

Critical insights into the personal auto, homeowners, and other consumer insurance markets to help P&C professionals stay informed – FREE! Sign Up Now!

Advertisement. Closing in 15 seconds.