Ida insured losses up to $25B: AIR Worldwide

AIR Worldwide said Friday that industry insured losses to onshore property from Hurricane Ida’s winds and storm surge will be $17 billion to $25 billion.

These estimates include insured physical damage to property, including residential, commercial, industrial and auto, for structures and their contents from winds, wind-borne debris, storm surge and the impact of demand surge.

The loss estimates also “reflect an adjustment to account for increased material and other repair costs in the current construction market” but do not include hurricane precipitation-induced flood losses, according to Boston-based AIR Worldwide, a Verisk Analytics Inc. business.

Ida made first landfall near Port Fourchon about 60 miles south of New Orleans, with a maximum sustained wind speed of 150 mph. Its second landfall was southwest of Galliano, with a maximum sustained wind speed of 145 mph.

Ida’s storm surge was along expected lines and generally not as severe as Hurricane Katrina’s, particularly in Mississippi and New Orleans. Utility disruptions caused by lack of power, mobile data services and water, however, could lead to Ida becoming a long-tailed event when it comes to claims reporting and payouts, AIR said.

New Orleans’ improved levees helped mitigate water damages, but wind damage was severe, with areas close to where Ida made landfall such as Lafourche Parish, where Port Fourchon is located, particularly hard hit with widespread destruction. Grand Isle Parish, a barrier island, has been declared uninhabitable.

Louisiana adopted improved construction codes in 2018 to make structures more resilient, but enforcement varies geographically, AIR said, adding buildings that are older and predate the adoption of some of these standards can be expected to perform worse and sometimes become debris sources that can impact adjacent newer buildings.

Building materials costs have gone up significantly in the past year from supply-chain disruption in the construction market and will contribute to higher rebuilding costs, AIR said.

“Although these costs have moderated since their peak in July when they were 80% higher than September of last year, they remain about 30% higher. Repair costs are still up significantly.”

This most recent loss estimate is largely in line with other previous figures.