Hurricane Harvey resulted in nearly 670,000 in combined personal and commercial property insurance claims to private insurers, the Texas Windstorm Insurance Association (TWIA) and the Texas Fair Access to Insurance Requirements Plan (FAIR Plan), insurance regulators said in a presentation to state lawmakers in late January.
The Texas Department of Insurance said that number includes about 354,000 residential property claims — including homeowners, residential and mobile homeowners — and about 203,000 automobile claims. Around 37,000 commercial property claims, 66,000 flood claims and 12,000 “other” insurance claims also have been filed as a result of damage from Harvey.
The numbers are derived from data collected by TDI through a data call to insurers issued on Sept. 21, 2017, and reflect information received through late October.
All property insurers in Texas, including admitted and surplus lines companies, TWIA, and the FAIR Plan were required to report on claims resulting from Hurricane Harvey, which made landfall on the Texas coast several times beginning on Aug. 25 of last year.
TDI said insurers reported $4.5 billion in paid losses as of the data call reporting date. While the numbers are expected to change as more claims are reported, settled, and closed, insurers estimate that Harvey’s paid claims would total $15.7 billion.
As opposed to 2008’s Hurricane Ike, which was largely a wind event, the bulk of Harvey’s damage was caused by flooding. The majority of Harvey claims and paid losses — about 90 percent — generated from Houston and Southeast Texas (collectively Houston Area), and the Coastal Bend.
Some 850 companies, or about 98 percent of the total property and automobile insurance market in Texas, responded to the data call, with 545 companies submitting data at the end of September. The rest of the companies submitted data in mid- to late October.
While the percentages differ by line of insurance, TDI noted that as of the reporting date, about 27 percent of claims for all types of insurance had been paid, or closed with a loss payment, 28 percent were closed without a loss payment, 44 percent were still open, and 7 percent had been reopened.
The agency said a high percentage of homeowners insurance claims were closed without payment because, especially in Houston and Southeast Texas, much of the damage to residential property was caused by flooding and homeowners policies typically do not cover flooding. Homeowners may have filed claims under their homeowners policy “to get a denial to apply for FEMA assistance,” TDI said.
The average claim amount for damage resulting from Hurricane Harvey to residential properties, excluding flood, is about $7,600. For flood insurance the average claims amount is around $80,000. For commercial property claims the average is about $95,000 and the average for automobile claims is about $16,000, according to TDI.
About 65 percent of automobile claims involved total losses, particularly in the Houston area. As of the reporting date 47 percent of automobile claims had been paid — closed with a loss payment. Around 5 percent of the auto claims had been reopened. On average, it has taken 13 days for insurers to close an automobile claim.
More than 90 percent of the automobile losses generated in the Houston area region, which also saw the highest average loss per policy, according to TDI.
For all regions in Texas, the average paid auto loss from Harvey is $19,943. The average paid auto loss in the Houston area is $20,544 while the average paid auto loss in the Coastal Bend area is $10,251.
TDI presented the results of its Hurricane Harvey data call to the Senate Business and Commerce Committee on Jan. 23.
The report is available on TDI’s website at http://www.tdi.texas.gov/reports/documents/Harvey-20180123.pdf.