August 29th — The 20th Anniversary of Hurricane Katrina

Insurance news was packed last week with stories involving Hurricane Katrina. It slammed into the Gulf Coast of the United States on August 29, 2005. Katrina bankrupted the National Flood Insurance Program (NFIP), and dramatically, and radically, changed how this country responds to hurricanes and other disasters. 

As most of you know, the hurricane hit New Orleans, Louisiana head on and the flooding that followed was catastrophic. The city’s poorly maintained levees collapsed with the wall of water storm surge that was taller than a two-story building.

Over 80% of the city was flooded for days.

Worse, 1,400 people lost their lives. Close to one and a half million people were displaced. Economic damages from Katrina hit $125 million, making it the deadliest, and most expensive storm in U.S. history at the time. Other communities in Mississippi and Alabama were devastated as well.

Response from the government was pitiful, to say the least. Resignations came in droves and that included Michael Brown, the director of the Federal Emergency Management System (FEMA) who oversees the NFIP.

Many neighborhoods and communities were heavily impacted, and some have never recovered.

Not so surprisingly, most Americans remember Hurricane Katrina and its devastation very well. A USA TODAY/Ipsos poll found 85% being very familiar with the hurricane, and this in spite of 20 years of more disasters, a major recession, nearly unprecedented political upheaval, and other more important events like the COVID pandemic.

"The images are just burned into people's minds and hearts and souls about what those days and weeks looked like with the city underwater," Mary Landrieu — a Democratic senator from Louisiana, the daughter of a New Orleans mayor and the sister of another — told USA TODAY. "The thousands of people that were stranded at the Superdome − I mean, that was a catastrophe and a real failure of the local, state and federal government.”

The Insurance Information Institute (Triple-I) said insurance losses hit $41.1 billion through more than 1.7 million claims from six states. That doesn’t include the NFIP losses of $16.1 billion and the couple of billion in losses from damages to offshore energy sources.

In 2010, the Triple-I compiled a loss list:

Losses by state:

Lousiana: $25,400,000

Mississippi: $13,800,000

Alabama: $1,100,000

Claims:

Lousiana

975,000 claims — or 55.9% of Katrina's insurance claims

Mississippi

515,000 claims — or 29.5% of Katrina's insurance claims

Alabama

109,000 claims — or 6.3% of Katrina's insurance claims

Florida

122,000 claims — or 7% of Katrina's insurance claims

Types of claims: Mostly homeowners, commercial and auto.

Homeowners

$17.9 billion

43.4% of the total claims

Commercial

$21.1 billion

51.2% of the total claims

Auto

$2.2 billion

5.3% of the total claims

Private and public claims payments

The National Flood Insurance Program

$16.1 billion

211,000 claims

Private insurance

$41.1 billion

1.7 million claims

There are several articles packed with great information on the hurricane and its impact on insurance then, and insurance and risk management now. The links to those stories are below.

And for those into great television, HBO did a series called, Tremme about New Orleans after Katrina. It’s packed with lots of different characters struggling with post Katrina issues. You can find it on Prime, and possibly other places.

Source link: Insurance Information Institute — https://bit.ly/4naqHjo

Source link: Business Insurance — https://bit.ly/4ngbMVc

Source link: Insurance Journal — https://bit.ly/3HSnOoA

Source link: USA TODAY — http://bit.ly/3VhiWwt