Ida loss estimates climb to $44 billion

Insured losses from Hurricane Ida could reach up to $44 billion, according to cat modellers at RMS. It now says the hurricane – among the strongest ever to hit the US – will cause at least $31bn of insured losses and perhaps up to $11bn more. The $44bn total is among the highest estimates so far.

Shortly after the Hurricane struck Louisiana earlier this month, RMS estimated onshore and offshore losses from the Gulf of Mexico would be between $25bna and $35bn. The total included up to $4bn from losses to the National Flood Insurance Program (NFIP) covering Alabama, Florida, Louisiana and Mississippi.

Its new estimate adds the impact of inland flooding across the Ohio Valley, Mid-Atlantic and Northeast US regions. It estimates these losses will add a further $6bn to $9bn to the total, including $1.5bn to $2.0bn borne by the NFIP.

“Ida will be remembered as a wind and storm surge event in the Gulf of Mexico and a flood event in the Mid-Atlantic and Northeast US,” said Jeff Waters, senior product manager for RMS North Atlantic Hurricane Models.

“The storm’s remnants brought historic amounts of rainfall over just a few hours to some of the most exposure-dense areas in that part of the country.”

Locations from Philadelphia to New York City experienced six-hourly rainfall totals over 100-year return period levels, he said.

“The fact that this region also experienced heavy rainfall from Tropical Storm Henri a few weeks prior created saturated antecedent conditions that exacerbated the extent and severity of flooding in Ida,” Waters added.

The losses were despite “a sizable flood protection gap”, said Firas Saleh, its US Inland Flood HD Model director. The business estimates total economic losses from flooding in the Mid-Atlantic and Northeast region to be over $15bn.

“Many properties in New York and New Jersey had inundated basements in areas outside the designated FEMA special flood hazard areas (SFHAs), which drive the requirement for homeowners to obtain a flood insurance policy,” said Saleh.

“While such losses will unlikely be covered unless they have a flood insurance policy, the pressure to expedite claims processing in this region is likely to cause coverage leakage as frequently seen with storm surge. We expect a portion of the uncovered flood-related losses in Ida to be paid out on wind policies, especially for residential lines without NFIP coverage.”