Monday, July 26, 2010

Katrina, five years later: "The costliest disaster in the history of the global insurance industry"

Five years after Hurricane Katrina slammed into Louisiana, leaving much of New Orleans underwater, the Insurance Information Institute, an industry-funded group, has put out a white paper detailing statistics from the disaster.

Some of the findings:
  • Private-sector insurers paid out more than $41 billion on 1.7 million auto-, home- and business insurance claims, making Katrina "the costliest disaster in the history of the global insurance industry."
  • The federal government's National Flood Insurance Program paid out an additional $16.1 billion in claims, "a dollar amount higher than what the NFIP paid to all of its claimants combined between 1968 and 2004."
  • And private-sector insurers paid between $2 billion and $3 billion in Katrina-related offshore energy facility claims.
The report also details the outcome of post-storm lawsuits aiming to define what damage was caused by wind and what was caused by water -- a key factor in determining whether homeowner's insurance pays for damage. From the report:

"Ultimately, insurers won virtually every major case that was filed against them post-Katrina, establishing or reaffirming important legal precedent in each instance."

To read the full III report, click here.

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