It has been estimated that the insurable losses following the Louisiana flooding in August is between $8.5 billion to $11 billion.
The estimation was projected by AIR Worldwide, a Verisk Analytics catastrophe modeling firm. Estimations reflect insurable physical damage to property and auto, as well as direct business interruption losses.
A range was specified instead of a single ballpark figure for the estimation to reflect the 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.
“Extreme rainfall-induced flash flooding and river flooding on the floodplain have wreaked havoc in Louisiana, breaking records and damaging property throughout many parishes,” remarked AIR Worldwide vice president and director of flood modeling Dr. Boyko Dodov. “Beginning around August 10, 2016, rainfall continued almost perpetually for approximately seven days, resulting in accumulations of around 7.1 trillion gallons in Baton Rouge and the surrounding suburbs, according to reports, reaching upwards of 30 inches in some areas.”
The estimates capture residential, commercial, and automobile losses from inland flood both on and off the floodplain based on 100 simulated event scenarios. AIR derived its estimates based on its AIR’s high-resolution Industry Exposure Database (IED) for the United States, with damage ratios estimated from reported flood inundation. The U.S. IED vintage is Dec. 2015.
According to a NOAA rapid-response study, August 2016 is currently the wettest month on record for Baton Rouge since 1907. A rainfall event such as the last one is expected to occur at least 40% often than it was in the preindustrial past.
Records were broken at 12 real-time river gauging stations of the USGS in Louisiana, which include the ones on the Amite, Comite, Tickfaw, and Tangipahoa rivers. Over 145,000 residences (housing upwards of 359,000 people) were in flood-affected areas, a report from the Baton Rouge Area Chamber. The same report noted that nearly 12,000 businesses which employ more than 136,000 people were in areas that were affected by the flooding.
Twenty parishes were declared major disaster areas by the federal government. FEMA issued $1 billion in Federal Disaster Assistance grants to those affected—some of whom were NFIP policyholders who received over $247 million to repair or rebuild their properties. More than 63,000 families sought assistance from FEMA for their housing. Reportedly, most of the homeowners affected by the floods did not have flood insurance since their homes did not lie in flood zones. As of AIR Worldwide’s release, about 850 people are still living in shelters.
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