Flood damage from Harvey may match Katrina
WASHINGTON: Flood damage in Texas from Hurricane Harvey may equal that from 2005’s Hurricane Katrina, the costliest natural disaster in US history, said an insurance research group.
As heavy rain pounded Houston and Texas’s coastal counties, the Insurance Information Institute said it was still too soon to make precise estimates of the damage to homes and businesses.
“It could be a flood loss like Katrina because of the amount of water that’s coming in ... not as much wind as it will be water,” said institute spokeswoman Loretta Worters.
Hurricane Katrina resulted in more than US$15 billion in flood insurance losses in Louisiana and Mississippi that were paid by the National Flood Insurance Programme (NFIP), a federal programme that is the only source of flood insurance for most Americans.
The NFIP is already deeply in debt and likely will have to be bailed out again by US taxpayers, as it was after Katrina, to cover
It could be a flood loss like Katrina because of the amount of water that’s coming in ... not as much wind as it will be water. Loretta Worters, institute spokeswoman
the bill for flood damage claims from Harvey.
Having dumped more than two feet (60 cm) of water on Houston already, Harvey, which hit the Texas coast as a Category 4 hurricane but is now a tropical storm, was expected to hover over Southeast Texas for several days and drop more than two more feet (60 cm) of water.
When hurricanes hit, many US homeowners suffer because they have no property insurance.
Others who do have it often discover they are not covered for flooding. Wind damage from hurricanes is covered by property insurers; f lood damage is not.
For that, property owners must turn to the NFIP, which backs flood policies sold and serviced by private insurers, including Allstate, Assurant and others.
The NFIP is managed by the US Federal Emergency Management Agency. Policies are sold to property owners by dozens of private insurers, with premiums going to FEMA.
A national poll by the Insurance Information Institute in 2016 showed only 12 per cent of people in flood-prone coastal areas had flood insurance, down from 14 per cent in 2015.
The NFIP was created in 1968 after private insurers stopped selling flood coverage.
Critics have said the programme provides a misguided tax subsidy to coastal and river valley property owners, encouraging development in flood-prone, often environmentally sensitive areas such as wetlands. — Reuters