Losses from Hurricane Isaac will not be as severe as they were from Hurricane Gustav for Louisiana residents, says the state's insurance commissioner.
In an interview with The Advocate, Louisiana Insurance Commissioner Jim Donelon says he expects losses from Isaac to be about half of the $2.2 billion that Hurricane Gustav cost insurers when that storm hit the state in 2008.
He was also quoted as saying that the state's insurer of last resort, Louisiana Citizens, will suffer around $75 million in losses.
There were fears that Isaac could prove to be the trigger for the insurer's $125 million catastrophe bond, Pelican Re. The bond would have been triggered if Citizens suffered more than $200 million in insured losses.
Initial estimates on insured losses from Hurricane Isaac ran to $2.5 billion.
However, Donelon says that the National Flood Insurance Program may pay out as much as private insurers from the storm. But many residents could be left with no insurance recourse. He says that only 40 percent of state's residents have flood insurance.
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