Ike Insured Damage Estimates Range from $6B to $18B

Estimates of insured damage from Hurricane Ike vary widely – from $6 billion to $18 billion, according to several catastrophe risk modeling firms, but Texas Insurance Commissioner Mike Geeslin has pointed out that only insurance adjusters on the ground would be able to accurately assess the extent of losses resulting from the storm.

Jerry Johns, with the Southwestern Insurance Information Service, noted that it is too early to accurately estimate insured losses and it may be weeks before preliminary numbers are available. “The real issue right now is getting adjusters access to Galveston Island. Search and rescue efforts are continuing which makes it unsafe for claim folks to access their insurers. We are asking victims of Ike to be patient. Adjusters will be contacting them just as soon as possible,” Johns said.

Catastrophe risk modeling firm AIR Worldwide Corporation has estimated insured losses to onshore properties in the United States from Hurricane Ike are between $8 billion and $12 billion, with an expected loss of $10 billion.

Extreme risk modeling firm EQECAT Inc., reported that initial post-landfall estimated insured onshore losses from Hurricane Ike could range from $8 billion to $18 billion, primarily in the Texas counties of Brazoria, Harris, Galveston, Chambers and Jefferson.

Catastrophe risk experts Risk Management Solutions (RMS) projected preliminary insured losses of between $6 billion and $16 billion. That estimate includes both onshore and offshore losses.

Hurricane Ike made landfall at Galveston, Texas at 3:10 am EDT, Saturday, Sept. 13, as a strong Category 2 hurricane. Maximum sustained winds at landfall were 110 mph, just shy of Category 3 on the Saffir-Simpson intensity scale.

Early damage reports include the destruction of several buildings lining the seawall. Several house fires in Galveston burned unchecked as firefighters were prevented from reaching them because of flooded streets and homes across the island are reported to have been damaged by Ike’s winds.

AIR said it expects significant damage to glazing in Houston’s high-rise commercial buildings. However, because such buildings are well-engineered and built to stringent code, AIR does not expect significant structural damage. On the other hand, while high-rise apartments and condominiums usually receive a similar degree of engineering attention as high-rise commercial construction, they often have building components that make them more susceptible to windstorms, including balconies, awnings, and double sliding glass doors.

Flooding continues to be a major concern despite the fact that the 20 foot storm surge that the National Hurricane Center (NHC) had warned of failed to materialize. According to information released this morning by the National Weather Service, the highest recorded surge was 13.5 feet, seen at Sabine Pass. Galveston Island recorded an 11 foot surge.

Sources: Air Worldwide, EQECAT, Risk Management Solutions, Southwestern Insurance Information Service