CoreLogic estimated Hurricane Francine insured losses to be up to $1.5 bn

CoreLogic Hazard HQ Command Central estimated Hurricane Francine insured wind and storm surge losses to be up to $1.5 bn. Losses include damage to buildings, contents, and business interruption for residential, commercial, industrial, and agricultural property.

The flood losses do not include precipitation-induced inland flooding and exclude losses to the National Flood Insurance Program (NFIP). This estimate does not include damage to offshore property.

Wind damage to residential property is the primary driver of modeled loss. National Oceanic and Atmospheric Administration (NOAA) tidal gauges recorded some minor and moderate flooding along the coastline from central Louisiana to Mississippi.

The vast majority of the modeled losses stem from damage in Louisiana with Mississippi and Alabama contributing slightly.

Accordind to CoreLogic, in Louisiana, the parishes of St. Mary, Terrebonne, Lafourche, and Ascencion are expected to be hit the hardest by Hurricane Francine wind and storm surge flooding. Losses from Hurricane Francine should be manageable for primary carriers.

National Hurricane Center forecast for Tropical Storm Francine

Total wind damage from Francine was limited by the sparsely populated coastal region nearest to landfall and the high degree of resilience in the built environment.

According to Gallagher Re, Storm Francine may cause over $1 bn in private insured losses. This $1 bn projection aligns with losses from recent storms in Louisiana. Gallagher Re added that the figure remains manageable for both the insurance and reinsurance sectors.

Louisiana, with its extensive coastline along the Gulf of Mexico, has a long history of hurricanes. These powerful, and often devastating storms, have shaped the state’s landscape, economy, and culture.

The areas affected by Hurricane Francine are still recovering from a long history of landfalling cyclones.

Hurricanes in Louisiana

• Hurricane Katrina which struck in August 2005 near Buras-Triumph, Louisiana, as a Category 3 hurricane with sustained winds of 125 mph. The storm surge overwhelmed the levee system in New Orleans, leading to catastrophic flooding.
• Just weeks later, Hurricane Rita struck Louisiana in September 2005, compounding the devastation caused by Katrina. Hurricane Rita made landfall near the Texas-Louisiana border as a Category 3 storm, causing significant damage in southwestern Louisiana.
• In 2008, Hurricane Gustav made landfall near Cocodrie, Louisiana, as a Category 2 hurricane. Gustav caused extensive damage to infrastructure and homes, particularly in the Baton Rouge area.
• In 2020, Louisiana faced an unprecedented hurricane season with multiple landfalls. In August of that year, Hurricane Laura, a Category 4 storm, made landfall near Cameron, Louisiana. Laura brought devastating winds and storm surge, causing widespread damage and fatalities.
• In August 2021, Hurricane Ida made landfall near Port Fourchon, Louisiana, as a powerful Category 4 hurricane with sustained winds of 150 mph. Ida caused catastrophic damage, particularly in the southeastern parishes. According to the Insurance Information Institute (III), insured losses from Ida (in 2023 dollars) are $40.5 billion.

Hurricane Francine is now joining that extensive list of Louisiana landfalling hurricanes, but it should rank well below previous storms in terms of impact to the insurance industry as a whole.

Louisiana has made large strides in recent years to better ensure property is resilient to hurricane damage. After the string of landfalling hurricanes in the 2020 and 2021 season, Louisiana updated its state-wide building code to the 2021 IRC. Building code enforcement has been mandatory since 2008.

Building code adoption and enforcement earned Louisiana rating of 91 in the Insurance Institute for Business and Home Safety’s Rating the States report.

Storm Surge Flooding in Louisiana

CoreLogic estimated that nearly 67,000 residential properties with a combined reconstruction cost value (RCV) of $15.9 bn are at risk of storm surge flooding if Tropical Storm Francine makes landfall as a Category 1 hurricane and maintains its current forecasted track.

The number of residential properties at risk to storm surge flooding by potential hurricane strength at landfall

Any landfalling hurricane in the Gulf of Mexico poses a significant coastal flooding, or storm surge, threat to life and property. The degree of storm surge inundation depends on several factors, including the storm’s width, speed, and intensity (e.g., wind speed).

Total reconstruction cost value of residential properties at risk to storm surge flooding by potential hurricane strength at landfall. Values in millions of USD

In addition, the Louisiana Department of Insurance recently began administering a program to provide grants to homeowners to update their roofs to meet the IBHS’ FORTIFIED Roof standard.

by Yana Keller