Posted on September 14, 2021
Insured losses from Hurricane Ida are now creeping into the $30 billion range after catastrophe modelers added damage to properties in the Northeast, putting the catastrophe on par with Hurricane Irma and Harvey in 2017 and Superstorm Sandy in 2012.
CoreLogic on Wednesday reported that it projects $5 billion to $8 billion in insured flood losses in the Northeast. That is in addition to the projected $14 to $21 billion in insured flood and onshore wind losses caused by Ida in Louisiana, Mississippi and Alabama.
That would put total insured losses at $29 billion, according to CoreLogic, a catastrophe modeler based in Irvine, Calif.
But analysts for Goldman Sachs released a separate report that cited estimates from unidentified loss modelers that damages will reach the $30 billion to $40 billion range. The company said reinsurers will bear much of that burden because U.S. insurers tend to cede much of their risk, but the losses remain manageable for most.
Catastrophe modeler RMS, based in Newark, Calif., on Monday projected insured losses from Irma will range from $25 billion to $35 billion, but that does not includes losses in the Northeast. RMS did, however, include losses to offshore oil platforms that estimated to range from $700 million to $1.5 million. CoreLogic’s projections excluded offshore equipment.
CoreLogic said much of the damages in the Northeast are related to the dense urban development of the region.
“Given the prevalence of multifamily housing and below-ground structures in these areas, we’ll see more extreme interior content damages than we typically see in southern coastal areas,” stated Shelly Yerkes, senior leader, insurance solutions at CoreLogic. “For example, many of the heating, ventilation and air conditioning systems in New York City buildings are in the basements, so contents damage should be substantial.”
The remnants of Ida dropped six to nine inches of rain on New York, New Jersey and surrounding states, causing flash flooding that overwhelmed storm water drain systems in an area with limited green space to absorb sudden deluges, CoreLogic said. Although Ida approached from a different direction, the rainfall it brought affected the same region as Superstorm Sandy.
CoreLogic said as catastrophic weather events become more common, local governments and property owners are making infrastructure and home resilience improvements.
“The flooding from Superstorm Sandy was more severe than Tropical Storm Ida,” stated David Smith, senior leader of science and analytics at CoreLogic. “Due to the repairs made in 2012, such as strengthening buildings and infrastructure and addressing deferred maintenance, New York was less vulnerable. Tropical Storm Ida’s effects on New Yorkers would have been worse if we hadn’t conducted these resilience-based repairs after Superstorm Sandy.”
Smith, during a webinar last week, made similar comments about levee improvements in New Orleans that were able to withstand Ida’s 8-foot storm surge.
Iceye Flood Solutions, which uses satellite images to measure the extent of flood damage, said in a press release Wednesday that 5,293 structures in New Jersey and southeastern Pennsylvania were impacted by floodwaters.
“Iceye’s analysis of the flooded areas in New Jersey and Pennsylvania uncovered the extensive impacts across several communities, with some of the worst hit areas having many buildings inundated with more than 3 feet of water,” stated Nathan Uhlenbrock, a solutions architect for Iceye.
He said the Schuylkill River Valley in Pennsylvania and the Raritan and Passaic River Valleys in New Jersey were particularly hard hit.
Thomas Johansmeyer, head of Verisk’s PCS division, said it is not unusual for storms to leave a long trail of destruction. He noted Hurricane Isaias in August 2020, which skirted the East Coast causing $4.5 million in damage from North Carolina to New England even though it only briefly achieved hurricane status.
Johansmeyer said it is also not unusual for the remnants of hurricanes that strike the Gulf Coast to generate flooding in Ohio, which suffers more storm damage from tropical systems than most people might think.
However, he said few storms manage to create an arc of destruction that crosses from the Gulf Coast to New England.
“This obviously is unusual and significant,” he said.
Johansmeyer said most catastrophe modelers will try to estimate losses by comparing Ida to Hurricane Laura in 2020, Hurricane Harvey in 2017 and Superstorm Sandy. He said PCS won’t release its own damage estimates until several weeks, after it receives loss reports from insurance carriers.