Levee systems, which came under scrutiny after Hurricane Katrina hit New Orleans 16 years ago, can still successfully mitigate water damage exposures from storms and floods, as was demonstrated in August when the city’s upgraded levees largely contained flooding after Hurricane Ida. 

Insurers and catastrophe modeling companies consider the protection offered by levees when they evaluate and rate risks.

“We have a team of engineers that focus on evaluating levees because we recognize the important role they play in the protection scheme for our clients,” said Katherine Klosowski, vice president and manager, natural hazards and structures, for FM Global in Johnston, Rhode Island.

Levees, embankments and walls built or enhanced to contain rivers and other bodies of water, are a form of flood protection.

When there is an adequately designed and maintained levee in place, “we consider that client to be a much better flood risk and to have a reduced hazard flood risk,” Ms. Klosowski said.

Boston-based catastrophe modeler AIR Worldwide also incorporates levees into its calculus when analyzing locations like New Orleans, according to Daniel Rees, senior scientist on the research and modeling team at the Verisk Analytics Inc. unit.

The company’s hurricane model assigns varying levels of protection to individual elements of New Orleans levee system, according to Mr. Rees. The research team also uses information about the city’s canals and pumps for its inland flood model.

Ida made landfall as a category four hurricane Aug. 26 near Port Fourchon, Louisiana, about 60 miles south of New Orleans. According to early estimates from various catastrophe modeling companies, the storm caused more than $30 billion in insured losses in the Gulf region. Hurricane Katrina, a category five storm that inundated much of New Orleans in 2005, caused $65 billion in insured losses. 

The Hurricane and Storm Damage Risk Reduction System, which was built after Katrina, protects Jefferson, New Orleans and St. Bernard parishes.

Kelli Chandler, regional director for the Southeast Louisiana Flood Protection Authority East, said the protection system functioned properly, reducing the risk for the area for storm surge.

“It definitely did what it is supposed to do,” Ms. Chandler said. “It was very effective and performed as expected.”

The authority manages 192 miles of levees and flood walls along the east bank of the Mississippi River, she said.

Craig E. Colten, professor emeritus in the department of geography and anthropology at Louisiana State University in Baton Rouge, said not all sections of the New Orleans levee system were tested equally or at all. 

Mr. Colten said the part of the levee system that was “relatively new and highly modified … seemed to have suppressed storm surge and kept it from getting into the industrial canal. The surge barrier and the strengthening of those levees I think did help. It closed off the Mississippi Gulf Outlet. Two avenues for water to get in from the east side of the city were basically blocked.” 

Elsewhere, however, improvements made in Jefferson Parish on what is called “The West Bank” were not significantly tested, he said.

The majority of losses to FM Global policyholders were associated with wind from Ida, not flooding, Ms. Klosowski said. “We look at that as a huge success for the local levee protection in that area,” she said.

Ken Tolson, president of network solutions for Crawford & Co. in Atlanta, who was on the ground in New Orleans, said Crawford has opened support rooms in Lafayette, Mandeville and Metairie. “As we are able to move people closer to the damage concentrated areas, they can spend less time traveling and more time inspecting or writing up damages and communicating with insureds,” he said. “This is improving every day and we are seeing the acceleration of claim closures/settlements like we always see after these events.”

Investing in mitigating flood and water damages can be felt beyond the New Orleans city limits. The Port of South Louisiana ranks first in tonnage, according to the U.S. Bureau of Transportation Statistics, Ms. Chandler said. 

“Economically, the flood protection for New Orleans is a wise investment,” said Sandy Rosenthal, founder of Levees.org, a public education nonprofit founded in 2005 after Katrina devastated New Orleans.
“The flood protection for New Orleans protects a region with a high density of people, property and infrastructure,” as well as the port shipping operations. 

Ms. Rosenthal added the New Orleans levee construction costs were pushed higher due to the urgency given the project after Hurricane Katrina and the resulting compressed time frame, putting the final cost of the project at about $15 billion.

The investment will continue to bear fruit. “Levees live for multiple decades,” Ms. Klosowski said.

Brunt of storm’s flood damage felt far from gulf

Hurricane Ida made landfall near New Orleans with some of the strongest ever sustained wind speeds, near 150 mph, but some of its worst flooding was in New York City.

“Ida was a rare storm in terms of wind speeds,” said Craig E. Colten, professor emeritus in the department of geography and anthropology at Louisiana State University in Baton Rouge, but “most of the worst rain was not in New Orleans.” 

After moving across the country, Ida dropped 6 to 8 inches of rain in the Northeast from Philadelphia to Connecticut and set an hourly rainfall record of 3.15 inches for Manhattan, breaking the record set by Tropical Storm Henri less than two weeks prior to Ida, according to the National Weather Service.

Ida’s one-two punch was like “working back-to-back hurricanes across a wide stretch of the country,” said Steve Powell, executive vice president for specialty operations, property Americas, at Sedgwick Claims Management Services Inc. in Nashville, Tennessee.

The labor crunch among claims adjusters that followed Ida was more intense than in 2020, when 30 named storms occurred in one hurricane season. “There is an epic strain on the supply and demand of qualified claims professionals,” Mr. Powell said.

Even though New York received historically intense rainfall, the flooding in the Northeast will cause shorter-term business interruption claims than Ida created in Louisiana because the Northeast didn’t have the widespread power outages, he said.

Ken Tolson, president of network solutions for Crawford & Co. in Atlanta, said the company opened a support room in Philadelphia for the Northeast damage.

While levees helped protect against the storm surge in New Orleans, the prescription is different in more concentrated urban areas.

“An urban flooding event needs to be protected against in a different way,” said Katherine Klosowski, vice president and manager, natural hazards and structures, for FM Global in Johnston, Rhode Island. “One of the things FM Global will talk to a client in New York City and other urban areas about is getting their electrical equipment out of the basement onto an upper level.” 

New York’s damages and claims were extensive enough to prompt the New York State Department of Financial Services to issue a letter the day after Ida hit the region to New York-regulated insurers, directing them to expedite Tropical Depression Ida-related insurance claims with measures such as increasing their resources to ensure “proper treatment of their policyholders” and allowing claimants to make immediate repairs to damaged property “if necessary to protect health or safety.”