Cost of Louisiana floods estimated at between $8.5 billion and $1 billion U.S.

http://autoinsurancereview.tk/wp-content/uploads/2016/09/flood_sized-238x143.jpg

Cost of Louisiana floods estimated at between $8.5 billion and $1 billion U.S.

August 2016 the wettest month on record for Baton Rouge since 1907.

Staff on September 19, 2016

It’s estimated that industry ground-up insurable losses—which include exposures eligible for coverage (regardless of whether they are actually insured) without any application of deductibles or limits—from the flooding in Louisiana caused by excessive rainfall during August 2016 will be between USD 8.5 billion and USD 11 billion, according to AIR Worldwide.

“Extreme rainfall-induced flash flooding and river flooding on the floodplain have wreaked havoc in Louisiana, breaking records and damaging property throughout many parishes,” said Dr. Boyko Dodov, vice president and director of flood modeling at AIR Worldwide. “Beginning around August 10, 2016, rainfall continued almost perpetually for approximately seven days, resulting in accumulations of around 7.1 trillion gallons in Baton Rouge and the surrounding suburbs, according to reports, reaching upwards of 30 inches in some areas.”

August 2016 is now the wettest month on record for Baton Rouge since 1907. A NOAA rapid-response study indicates that a rainfall event such as this is expected to occur at least 40 per cent more often than it was in our preindustrial past.

AIR’s loss estimates explicitly capture residential, commercial, and automobile losses from inland flood both on and off the floodplain based on 100 simulated event scenarios that reflect uncertainty in precipitation observations and modeled levee failures. These loss estimates were derived based on AIR’s high-resolution Industry Exposure Database (IED) for the United States and damage ratios estimated from reported flood inundation. The U.S. IED vintage is December 2015.

AIR’s insurable loss estimates reflect:
• Insurable physical damage to property (residential, commercial), both structures and their contents, and auto
• Direct business interruption losses

The loss estimates do not reflect:
• Losses to land
• Losses to infrastructure
• Losses to CAR/EAR, Marine Hull, or Marine Cargo lines of business
• Indirect business interruption losses
• Loss adjustment expenses
• Demand surge—the increase in costs of materials, services, and labor due to increased demand following a catastrophic event. Demand surge can be applied by AIR software users who want to account for this variable.

Source link

Cost of Louisiana floods estimated at between $8.5 billion and $1 billion U.S.