Hurricane Katrina is expected to cost U.S. property/casualty insurers an estimated $34.4 billion in insured property losses, making it the costliest U.S. catastrophe ever, according to preliminary estimates by ISO’s Property Claim Services (PCS) unit.
Katrina caused widespread damage to homes and businesses in six states – Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia. New Orleans bore the brunt of the hurricane’s fury as rising flood waters and wind wreaked havoc on the city.
Policyholders in the affected states are expected to file more than 1.6 million claims for damage to personal and commercial property, automobiles, and boats and yachts.
At an inflation-adjusted $20.8 billion, Hurricane Andrew in 1992 was the costliest catastrophe in the U.S. until now.
Following is the breakdown of insured property damage and claims count:
State Losses ($) No. of Claims
Louisiana 22.6 billion 900,000
Mississippi 9.8 billion 490,000
Alabama 1.3 billion 123,000
Florida 468 million 110,000
Tennessee 46.1 million 8,400
Georgia 22.2 million 3,300
The personal property loss claims include nearly 75,000 boats and yachts in the affected states, with an estimated insured value of slightly under $2 billion.
Insurers are still assessing individual losses and analyzing various scenarios that will affect ultimate claim payments, according to PCS. Handling claims from this wide-ranging devastating event has been difficult for several reasons, including limited access to damaged areas, difficulty in tracking down property owners who evacuated to other locations and breakdown of the communication infrastructure.
PCS will resurvey insurers in 60 days as more claims are filed and existing claims are closed.
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