RMS Updates Katrina Losses

Risk Management Solutions recently announced that insured losses from Hurricane Katrina are estimated to be $40-$60 billion, of which $15-$25 billion are related to the Great New Orleans Flood. Total economic losses are now expected to exceed $125 billion. On September 2, RMS released a preliminary insured loss estimate of $20-$35 billion (excluding flood losses in New Orleans). At that time, total economic losses were estimated at over $100 billion. Today’s revised estimates reflect an extensive analysis that RMS has performed to model and estimate the insured and uninsured loss components of the flood.

Standard commercial and residential policies issued by private insurers cover wind damage, but flood is excluded. Businesses and homeowners can obtain coverage with fixed limits through the National Flood Insurance Program (NFIP). Private sector insurers also offer coverage in excess of the limits provided by the NFIP, which is commonly purchased for high-value commercial properties or homes.