Florida was able to evade the path of Tropical Storm Isaac on Sunday, suffering little wind damage and minor power outages. However, the storm continues to build steam, expected to be a Category 2 hurricane with a diameter of more than 580 miles heading for the Gulf Coast.
According to CoreLogic, this leaves insurers with $36 billion in potential exposure to residential property damage to brace for. This high estimate is largely the result of remaining uncertainties. While estimates have the storm moving onto land within the next 48 hours, where it will strike is still unknown.
“The current cone of uncertainty puts the coast of Louisiana, Alabama, Mississippi and Florida at risk,” said Howard Botts, VP and director of database development for CoreLogic. “Major metro areas that could potentially feel the impact of hurricane-driven storm surge include: New Orleans, La.; Biloxi, Miss.; Pascagoula, Miss.; Mobile, Ala.; Pensacola, Fla. Panama City, Fla.; and Ft. Walton, Fla., depending on where the storm makes landfall,” The most expensive among them being New Orleans, where the analytics firm estimates $30.44 billion worth of property will be at risk.”
The biggest threat to properties in those areas is storm surge flooding, which could affect nearly 270,000 homes is Isaac strikes as a Category 2 hurricane, according to CoreLogic.
Robert Hartwig, president of the Insurance Information Institute (I.I.I.) is confident that insurers are prepared: “The property/casualty insurance industry is extremely strong financially despite a near record-breaking $33 billion in insured catastrophe claims in 2011 and $10 billion in the first half of 2012.” Hartwig added that the industry’s claims-paying capacity stands at record-levels, given the relatively few cat losses suffered so far in 2012—$9 billion for tornadoes and thunderstorms this year pales in comparison to the $26 billion incurred last year, and the rampant wildfires and droughts have generated $500 million in claims to date, according to the I.I.I.
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