Insured losses from Beryl could top $2.6 billion in Houston area alone

October 25, 2024 9:29 am Published by Insurers will have to shell out between $2.5 billion and $3.5 billion for property damage caused by Hurricane Beryl winds in Texas, an Irvine, California-based property data company estimates. The brunt of the damage is in three Houston-area counties. Per Jon Schneyer, director of catastrophe response for CoreLogic, $875 million to $1.6 billion would apply to the properties in Harris County, as reported in the Houston Business Journal. In Fort Bend and Brazoria counties, another 30 percent would fall in the bucket, amounting to approximately $750 million to $1 billion.  
Catastrophe models estimate insured losses for residential, commercial, industrial and agricultural properties based on wind strength in specific areas and the types of buildings that just happen to be in the storm’s path.
 
“We have actually embedded in these models functions that say, if you had a certain type of home that was exposed to a certain wind speed, it had on average this amount of damage,”
Schneyer said. And if we know that home is insured up to $300,000 and a 2% deductible, we can calculate how many losses are going to go to the insurer, how much of this loss can be retained by the homeowner or business owner. The estimate does not include damages due to water or any other damage unrelated to wind. Neither does it give the total damage of the hurricane as it only represents the damage which has been insured. The amount that is below the deductible or exceeds the insurance limit shall be excluded. AccuWeather’s first estimate puts the total damage and economic loss from Beryl in the United States at $28 billion to $32 billion. Moving away from Houston, the storm also brought in many tornadoes and flooding through eastern Texas into Arkansas and southeastern Missouri as it moved through the Midwest and then New England.  

Beryl was a very different Category 1 hurricane, said Schneyer.

  It really acted like a Category 2 hurricane, where even six hours after landfall, when it was turning north, northeast, and going by northern and western Houston, we were still seeing observations of hurricane-force wind gusts in excess of 80 miles an hour,” he said.     It is also difficult to make direct comparisons to the same sort of storms in Beryl, notably Harvey in 2017, which was a flooding event for the Houston area and did not make much of a dent locally from wind damage. Estimated total damages Harvey was the second-costliest hurricane to land on the United States behind Katrina in 2005 at an estimated total of $125 billion. Consulting company Aon estimated Harvey’s overall insured property losses to be at $30 billion, or $37.6 billion in dollars, for 2023.
Probably the closest to Beryl in the Galveston-Houston area was Hurricane Ike, Schneyer said, which impacted the area in 2008. The Category 2 hurricane brought stronger winds and also storm surge.
Insured losses for Ike totaled $18.2 billion, or about $25.6 billion when adjusted for inflation, according to data compiled by the Insurance Information Institute from Aon. Harvey and Ike rank Nos. 5 and 10, ever, on the list of insured losses from natural disaster in the United States, according to the organization’s list.
One recent hurricane that had numbers more similar to Beryl was Idalia in 2023, Schneyer said. However, those numbers would have been higher if the Category 4 storm had hit an area as populated as Houston.
  Idalia made landfall in a pretty remote area of the Florida coastline, stayed east of Tallahassee as it kind of tracked over the southeast United States, said Schneyer. With Beryl being the earliest Category 5 hurricane-as it was at times barreling through the Caribbean Sea-there is no reason to think Texas won’t get another major storm this year, he warned.
“I think you shouldn’t be surprised to see more significant hurricanes this hurricane season,
” he said. “It’s definitely a peril we need to really keep an eye on this year because if this happened in late June, early July, it could happen again in September (or) October, easily.”

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This post was written by Trishala Tiwari

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