Boston-based catastrophe modeling firm AIR Worldwide has estimated property losses from the flooding in Texas caused by Hurricane Harvey’s record-breaking rainfall will be between $65 billion and $75 billion.
These figures include damage to all properties eligible for coverage regardless of whether they are actually insured and without any application of deductibles or limits. They do not include losses from Harvey’s winds or storm surge.
AIR estimates that industry insured losses from wind, flood, and storm surge combined are expected to exceed $10 billion with approximately $3 billion of the losses resulting from winds and storm surge. These estimates do not include losses to the National Flood Insurance Program (NFIP).
According to AIR, before Harvey hit on Aug. 24, it had been almost a decade since the last hurricane landfall in Texas — Hurricane Ike in 2008. The last Category 4 storm to impact the state was Hurricane Carla in 1961. The last Category 4 hurricane to make landfall anywhere in the U.S. was Charley in 2004, which struck southwestern Florida.
Harvey brought excessive and record-breaking rainfall; 51.88 inches were recorded in Cedar Bayou near Houston, which shattered the previous 48-inch rainfall record from any tropical storm or hurricane in the contiguous United States set by Tropical Storm Amelia in 1978 in Medina, Texas.
The National Weather Service in Houston officially recorded 43.38 inches and 32.47 inches were recorded at Houston Hobby Airport, which exceeded the previous three-day record for any major U.S. city.
In Beaumont, 26.03 inches of rain were recorded on Tuesday, August 29, more than doubling its prior daily rainfall record of 12.76 inches set in 1923; the rainfall total there has been reported at 47.35 inches.
As of Aug. 30, more than five stations across southeastern Texas had surpassed 45 inches of rainfall. Reports indicate that Harvey dropped a total of 27 trillion gallons of rain on Texas and Louisiana in six days.
AIR’s property loss estimates for flooding from Harvey capture losses from inland flood both on and off the floodplain based on simulated event scenarios that reflect uncertainty in precipitation observations, river flows, and modeled levee failures. The modeled hazard intensities reflect the maximum estimated river flows and maximum excess runoff intensities during the event from Aug. 25–31, 2017.
Included in the estimates are onshore residential, commercial, and industrial properties and their contents, automobiles, and time element coverage (additional living expenses for residential properties and business interruption for commercial properties; the estimates do not, however, include contingent business interruption losses resulting from the closure of oil refineries in the region).
The range in AIR’s loss estimates reflects uncertainty in the payment of additional living expenses resulting from relocation, time spent in secondary housing, lost wages, loss of electricity, and damage to contents.
Total economic losses are expected to be higher than industry insurable loss estimates.
Source: AIR Worldwide