The Texas Insurance Council has issued an update on the financial aftermath of Hurricane Ike, which struck Galveston on Sept. 13, 2008 calling it “the costliest weather catastrophe in Texas history by a large margin.” So far, the storm has toted up almost $12 billion in windstorm and flood insurance claims in the state. The windstorm portion of that number accounts for $9.8 billion, while the rest is due to flood insurance claims – almost 44,000 of them were filed after Hurricane Ike.
Much of the flood damage was due to the storm’s 16-foot surge, which destroyed businesses and homes on Bolivar Peninsula, as well as several communities surrounding Galveston Bay, along the Texas coastline, and inland from Orange to Freeport. In addition, more than half of Galveston Island was submerged by the rising water. Fortunately human loss was low – only 20 deaths were directly attributable to the storm, mostly from drowning, because the coastal residents took a lesson from Hurricane Katrina, and actually followed evacuation orders from the National Weather Service.
The Texas Department of Insurance reported that there were more than 800,000 windstorm claims from Hurricane Ike. Sixteen months after the fact, one insurer, the Texas Windstorm Insurance Association, is still receiving damage claims. Eventually, TWIA is expected to pay out almost $2 billion in Ike-related claims.
Texas wasn’t the only state heavily damaged by Hurricane Ike. The path of the hurricane after landfall took it up the Intersate 35 corridor, where it settled over the midwest dumping inches of rain, and causing more damage. In addition, neighboring state Louisiana reported $318 million in flood losses, while hurricane-force winds in Ohio created insured losses in excess of $1 billion, making it the costliest weather disaster in that state, as well.
While wind damage is generally covered by homeowners insurance, flood damage is not. Coastal residents in states like Texas and Florida are urged to examine their policies now, check to see if they live in flood zones where mandatory flood insurance is required, and update their coverage as necessary.