Gulf Coast risk managers are poorer but wiser five years after Hurricane Katrina, having weathered the high cost of insurance in the aftermath of the catastrophe while learning valuable lessons that have left them better prepared for such storms.

As soon as Katrina's flood waters receded, insurance buyers found coverage drying up as well. Availability shrunk and prices swelled for windstorm and flooding risks. In some cases, only now are those problems nearly resolved.

“Our big challenge—and we have just about overcome it five years later—was that virtually every insurer on our program had a levee exclusion” at the renewal after Katrina, said James D. Hinton, vp-risk and insurance at Nashville, Tenn.-based hospital company HCA Inc.

HCA operates Tulane Medical Center and two other hospitals in the New Orleans area, part of its multihospital organization in which half of its $40 billion in insured property values is in locations vulnerable to windstorms, Mr. Hinton said.

Immediately after Katrina, “the market got real tight for wind (risks),” Mr. Hinton said. Its latest renewal May 1 was the first since Katrina in which HCA secured the $350 million coverage limits it needs to cover its probable maximum property loss, he said. The windstorm coverage is part of a $1 billion blanket program covering HCA properties, he said.

Boh Bros. Construction Co. L.L.C. was involved in rebuilding areas devastated by Katrina. The company discovered that the builders risk insurance it needed to cover its projects evaporated after the storm, said Warren C. Perkins Jr., vp and risk manager of the New Orleans-based company.

Coverage rates skyrocketed, doubling for some commercial construction policyholders. Since then, they have softened as subsequent years had relatively mild hurricane seasons “and availability has gotten better,” Mr. Perkins said, noting that insurers that fled the market have returned.

“That was a big challenge that we faced—convincing the builders risk market that they could come here and make money,” Mr. Perkins said. Insurers have returned, he said, partly because they are confident that flood protection programs in New Orleans will keep the city safe from a repeat of flooding like that from levees that failed under Katrina's storm surge.

Mr. Hinton said HCA's rates for windstorm coverage were high even before Katrina because the company has so many coastal locations and hurricanes in 2004 boosted rates. Katrina was responsible for another increase of about 25%, he said.

Today, the cost of coverage remains high compared with before the storms in 2004, but it fell 5% to 10% this year, Mr. Hinton said.

Commercial insurance buyers in the Katrina-stricken area have learned the value of planning for the risk of storms and their aftermath, sources said.

“If you are a coastal insured—a regional or national customer—you have a more comprehensive plan than in 2004 and 2005,” said Al Tobin, New York-based national property practice leader at Aon Risk Services. “Written, well-defined plans on how to respond certainly exist more than they did then.”

“What I have seen is an emphasis on, or awareness of, the catastrophe exposure and what the needs might be” to prepare for and recover from a storm, said Bud Trice, vp of U.S. property/casualty catastrophe services at Atlanta-based Crawford & Co.

When Katrina hit, many large companies were ready with contingency plans, Mr. Trice said. That was not the case for some risk managers and many smaller companies, he said.

Many companies that found their plans were inadequate have strengthened them, Mr. Trice said. In addition, some companies with Gulf Coast exposures have redesigned their catastrophe plans in response to the more recent Deepwater Horizon oil spill, he said.

“They are looking for a holistic plan” that will provide a response not only to a hurricane but other threats, such as that posed by the oil spill, Mr. Trice said.

Mr. Hinton said the series of hurricanes that struck Florida and the Gulf Coast in 2004 provided some lessons that HCA put to use when Katrina arrived in 2005. “We had an infrastructure in place; we learned how to pre-position some generators, for example, and we arranged for satellite phones” before Katrina made landfall, he said.

“But out of Katrina, we learned to establish a command center,” Mr. Hinton said. “We have a more formalized emergency preparedness program,” he said, because Katrina's exceptional fury meant HCA faced unprecedented challenges.

“We had to find planes and air traffic controllers because we had to evacuate hospitals,” he said.

Employees lost homes and many wanted to move out of the area for good, Mr. Hinton said. With so many U.S. locations, HCA was able to accommodate employees who wanted to move away from the coast, he said.

“Now, this time of year, we practice all of this,” Mr. Hinton said of efforts to be ready should another hurricane strike.

Mr. Perkins said Boh Bros. has adjusted its planning to include arranging housing for its employees that need to be in the area during recovery operations after a future storm.

“Our whole company has evolved” with regard to risk management, Mr. Perkins said. A new safety director and management team have helped improve risk management at Boh Bros., making it “a lot more sophisticated than it was” at the time of Katrina, he said.

Risk management experience gained during Katrina has paid off in other catastrophes, Aon's Mr. Tobin said. “The hospitality industry learned many lessons and they are better prepared,” he said.

Aon's clients include “global franchise hotels that were very well-prepared” for the earthquake in Chile this year, Mr. Tobin said. The hotels applied lessons learned from sister properties on the Gulf Coast that were hit by Katrina, he said.

“Preloss planning and postloss execution” allowed the hotels to function with the resources they needed and keep their personnel on the properties during the earthquake recovery, Mr. Tobin said. “They did an exceptional job in keeping their doors open.”