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Schooled by Katrina?

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New Orleans is far better prepared for a major hurricane 10 years after Hurricane Katrina devastated much of the city, but the same is not necessarily true for other cities along the Gulf and East Coasts.

Many companies have taken steps to harden their properties against wind and flood risks; and modeling of wind, storm surge and flood vulnerabilities has improved markedly in the past decade.

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But experts say property owners and public entities still can be blindsided by the fallout from such storms, as demonstrated by the destruction wrought by Superstorm Sandy in New York and New Jersey in 2012.

“Did we learn the lessons so harshly dealt to us in New Orleans? Absolutely not,” said Chris Johnson, executive vice president at FM Global in Johnston, Rhode Island. While the Crescent City and certain other “pockets” along the coasts are better prepared, “until we have been dealt the blow, we can't conceive it could happen to us.”

Communities that haven't been through a major hurricane can suffer from a not-in-my-backyard” complacency, said Duncan Ellis, national property practice leader at Marsh L.L.C. in New York.

“If a big storm comes in, there's still going to be a big loss,” said Rick Miller, Aon Risk Solutions' national property practice leader in Boston. Tougher building codes and storm-hardened buildings may help, but “I don't think we'll really know until they're tested.”

No hurricane that has hit the United States since Katrina has been even close to its strength and impact to test changes made during the past decade.

But New Orleans and other areas have responded. Since Katrina, the U.S. Army Corps of Engineers led a nearly $15 billion federal effort to rebuild miles of levees around New Orleans.

A 1.8 mile-long surge barrier on Lake Borgne, which was completed in 2013, aims to stop water from surging up the Mississippi River Gulf Outlet Canal and into New Orleans' Inner Harbor Navigation Canal, as it did during Katrina, bursting levees and flooding St. Bernard Parish and the city's lower 9th Ward.

Drainage canals on the north side of the city, where wind- and tide-driven water from Lake Pontchartrain inundated the Lakeview and Gentilly neighborhoods, are being closed against incoming surges with new pumping stations to handle outgoing drainage water. Permanent storm surge barriers and pumping stations on the three drainage canals are under construction, replacing temporary barriers put in place after Katrina.

The levee and surge systems are designed to protect against a 100-year event, and experts say New Orleans would fare much better today than it did a decade ago.

“The same storm is not going to cause the same damage we saw in 2005,” said Jayanta Guin, executive vice president at Boston-based modeler AIR Worldwide.

Along with the danger of storm surge, Katrina raised awareness of other risks, including contingent business interruption that followed the massive disruption of transportation and other systems; and demand surge, or increased repair costs from shortages of materials and labor after a disaster, brokers and insurers say.

But for private and public property owners in many coastal areas, the risks won't be heeded until a catastrophe hits home, experts say.

It took 1992's Hurricane Andrew to start changing disaster planning in Florida, said David L. Marcus, area chairman at Arthur J. Gallagher & Co.'s public sector practice in Boca Raton, Florida. Since Andrew, building codes have been tightened, and property owners have taken steps such as installing impact-resistant glass, building parapet walls around roofs on new construction, and removing air conditioning and other equipment from rooftops, Mr. Marcus said.

Seven years after Katrina, meanwhile, New York and New Jersey were largely unprepared for the massive storm surge and flooding brought by Sandy. In lower Manhattan, where the surge was a record 9.5 feet, water poured into subway, railroad and traffic tunnels and submerged basements of downtown buildings, moving from building to building through utility tunnels.

Federal and state authorities are still pursuing infrastructure improvement ideas that range from raised stone revetments and bulkheads and tide gates at creeks and inlets to man-made offshore barrier islands to slow incoming water.

Building owners have taken their own steps, moving valuable property and equipment out of basements and having mobile emergency flood barriers ready.

Mobile barriers, metal-framed flood-resistant panels that can be put up around a building in a matter of hours, are “100 times more effective than sandbags,” said FM Global's Mr. Johnson. “Were it not for Katrina, those products would not have been thought of. Were it not for Sandy, they would never have been deployed.”

The interlocking metal-framed marine plywood panels that can stand up to about 8 feet high are easier to store and erect than sandbag walls and, according to Mr. Johnson, are more effective.

Katrina and Sandy also changed insurance programs. Many policyholders have increased flood insurance limits after suffering losses that weren't covered by previous insurance, experts say.

“There's probably a better conversation (now) on what is an appropriate amount of capacity,” Mr. Johnson said.

Flood limits of up to $500 million are available from traditional markets, brokers say, and buyers unable to find adequate capacity can turn to alternative risk transfer methods. A captive insurer for New York's Metropolitan Transportation Authority, for instance, is covered for storm surge risks by a three-year, $200 million cat bond placed in 2013.

More than ever, risk managers need to read and understand the terms of policies that are expected to respond to hurricane losses, brokers and insurers stress.

Uninsured flood losses have “highlighted for many that being crystal clear on the definitions of what is and is not covered is important,” Mr. Johnson said.

Still, hard experience too often is the best teacher, experts say.

“I don't know why people who are on Water Street would not think their building could get flooded,” Mr. Marcus said of a lower Manhattan street flooded by Sandy. “Sometimes, people have to wake up and not wait until they're slapped in the face to do something.”