Hurricane Ike Damage Estimates SurgeOct 28, 2008 | Parker Waichman LLP
A risk assessment group now says damage costs from Hurricane Ike could go as high as $21 billion. That figure would make Hurricane Ike the third most expensive storm in U.S history, behind Hurricanes Katrina and Andrew.
The new estimate from Risk Management Solutions of $13 - $21 billion is higher than the $7 - $21 billon figure the group released just four days after the Sept. 13 storm. The damage estimates include $10 billion to $15 billion for wind and storm surge, $2 billion to $3 billion from inland wind and flood losses and $1 billion to $3 billion in offshore losses.
Meanwhile, another report has found that Texas leads all other states in insured losses this year, owing mostly to the impact of Hurricane Ike, as well as Gustav and Dolly, on the state. The Insurance Services Office (ISO) reports that insured losses from the first three quarters of 2008 amount to $7.7 billion for Texas. The figure is expected to top $10 billion by the end of the year.
According to the ISO, losses from Hurricane Ike, which hit Texas on Sept. 13, could exceed $10 billion. The storm also caused $1.2 billion in insured losses in Ohio. The losses from Hurricane Gustav, which struck in Louisiana on Sept.1, have reached $1.9 billion and insured losses from Hurricane Dolly which struck South Padre Island and south Texas on July 23, could reach $1 billion.
Earlier this month, the Texas Windstorm Association said it hads received around 76,000 damage claims so far from Hurricane Ike. Texas Windstorm Insurance Association general manager Jim Oliver told the Associated Press at the time that the final number of claims that the Association is responsible for will depend on whether damage to a property was caused by wind or storm surge. The Association won’t pay for storm surge damage, which it considers to be flooding. “We are going to look at every single claim individually,” Oliver said. “That is going to make the process slow.”
Shortly after Ike struck the state, a Texas consumer advocacy group criticized the Windstorm Association’s stance on storm surge damage. “Though this is a predictable industry attempt to deny thousands of legitimate storm surge claims, this position is ludicrous. After all, storm surge is a phenomenon peculiar to windstorms, which should be covered by windstorm insurance,” Alex Winslow, executive director of Texas Watch, said in a memo to state and local officials.