View this article online: https://www.insurancejournal.com/news/southcentral/2016/08/25/424516.htm
Initial estimates from Louisiana’s Office of Homeland Security and Emergency Preparedness indicate that more than 60,000 homes have been damaged in the 20 parishes impacted in the extensive precipitation-induced flooding in southern Louisiana over the previous two weeks, according to catastrophe modeling firm AIR Worldwide.
The record rainfall event in south central Louisiana Aug. 8 – 15 resulted in major property damage, significant business interruption and 13 deaths.
In Livingstone Parish, which received more than 31 inches of rain in some areas, 75 percent of homes are reportedly a “total loss.”
A preliminary analysis for the nine parishes within the Baton Rouge metropolitan area issued by the local Chamber of Commerce (BRAC) on August 19 indicates that the capital region’s area of flood impact covers more than 1,000 square miles. This area alone contains 110,000 homes, 31 percent of which are located in areas identified as having been flooded.
The total value of properties in these flood affected areas is estimated by BRAC to be $20.7 billion; 66 percent of them were owner-occupied, 22 percent were rented and 9 percent were vacant. The flood-affected area also contains an estimated 7,364 businesses, 21 percent of the capital region’s total, together employing 73,907 individuals.
“The historic flooding in and around Baton Rouge and other areas is a combination of several factors including riverine (on-floodplain) flooding, backwater in tributaries due to high flood stages in main rivers, and significant local flash flooding (off-floodplain) caused by intense rainfall, flatter terrain, and limited drainage capacity that was further exacerbated by backwater effects. Many of the areas that flooded were outside the 100-year floodplain and were not considered at high risk,” said Dr. Hemant Chowdhary, principal scientist at AIR Worldwide.
Residential flood insurance is typically offered to homeowners through the National Flood Insurance Program (NFIP).
FEMA estimates that 42 percent of homes in high-risk areas of Louisiana have flood insurance, but that in low and moderate-risk zones only 12.5 percent or so of homes do. Across Baton Rouge as a whole, no more than 15 percent of all homes have flood insurance, and in the other hard-hit location, Lafayette, the rate is 14 percent. In some areas, penetration is much lower.
According to Louisiana Insurance Commissioner Jim Donelon, the total number of policies in Louisiana rose to 490,000 in response to the devastation that followed Hurricane Katrina, but has since decreased to 450,000.
The experience of Hurricane Katrina revealed that commercial insurers did not always have good information about their exposure to flood and estimates of total industrywide insured flood values remain hard to obtain, according to AIR.
Impacts to the insurance industry will become clearer as floodwaters recede and assessments can be conducted.
More than 110,000 people have already registered with FEMA for federal disaster aid. At least $20 million has been distributed in advanced payments to NFIP policyholders so far and the number of claims being submitted is climbing rapidly.
For residents without flood insurance, short-term relief for immediate needs is available from FEMA, but the most available under the Assistance to Individuals and Households program is just $33,000, and few will be eligible for this maximum payout. At least $55 million to help survivors with temporary rental assistance, essential home repairs, and other serious disaster-related needs has already been approved.
Source: AIR Worldwide