Louisiana homeowners’ insurers are largely expected to escape a significant loss burden from the deluge that has flooded large areas of the state in recent weeks, according to underwriting sources. Flood cover is typically not included in homeowners’ policies, with owners of properties in high-risk areas instead left to buy protection from the National Flood Insurance Program (NFIP), or standalone private products where available.
But according to modeling firm AIR Worldwide, the vast area affected by the floods meant that the modeled probability of the event corresponded to a 1,000-year return period, with an estimated 60,000 homes damaged across 20 state parishes.
While up to 75 percent of properties are considered a total loss in one of the worst-hit areas of Livingston, the number of coverable claims received by carriers across the state remains relatively small. The extent of flooding outside of Louisiana’s high-risk zones means that many of the properties affected will not have bought cover.
“The penetration of flood insurance in some of those areas is very low, so you will have a lot of retained losses, certainly on the homeowners’ side,” said an underwriting executive.
With residential flood cover usually onlyavailable through the NFIP, the Federal Emergency Management Agency (FEMA) has estimated that 42 percent of homes in Louisiana’s high-risk flood zones have cover in place for the peril.
In low and moderate-risk zones, however, that drops to just 12.5 percent. Across the Baton Rouge area, no more than 15 percent of homes have flood insurance, while Lafayette, also hard-hit, has a take-up rate of 14 percent.
According to Enda McDonnell, co-CEO of Louisiana carrier Access Home Insurance, the flooding will predominantly be an expense event for his company. That is because many affected homeowners will lodge uncovered claims with insurers that will need to be assessed first in order to get the letter of denial they need to then apply for federal aid from FEMA.
Another senior executive at a Louisiana homeowners’ carrier told The Insurance Insider that his company has been able to determine coverage for only around 10 percent of the claims calls it has fielded. With no flood cover included, payouts instead will be for damage from falling trees or minimal wind damage to properties that has led to water losses.
“But of the other 90 percent, very few will have had flood coverage [from other sources] so they’re just going to be uncovered losses,” he continued.
The executive added that owners of properties outside of the flood plain would not have been recommended to buy flood cover by their insurance agents, even at a minimal cost.
One area of exposure for insurers might be where they have significant portfolios of mobile home business on their books.
A number of mobile home carriers in the state allow flood to be endorsed to their property policies. Indeed, Louisiana carrier, Maison listed parent 1347 Property Insurance Holdings said that it expected to incur losses from claims related to damage from the storms that caused the flooding. It explained that the event had impacted its manufactured and mobile home policies, with some wind damage claims also expected on its homeowners’ book. The company said that losses were not expected to exceed its $5M cat reinsurance attachment point, but that it may have recoveries under its per-risk program.
By David Bull, Insurance Insider, August 30, 2016.
In light of the terrible flooding in Louisiana, we’ve compiled the following helpful tips.
To volunteer to help with flood relief, visit www.volunteerlouisiana.gov to register.
Live updates on the flood can be found at gov.louisinan.gov.
The FEMA ap provides National Weather Service alerts, shelter locations, safety tips, emergency checklists among other helpful tips.
Never drive through water. Turn around.
FEMA assistance is available for 4 parishes. Apply at disasterassistance.gov or call 1-800-621-3362. You will need to have the following information on hand: your Social Security Number, the address of your home, a description of the damage, insurance information, your telephone number and address and bank routing numbers and account numbers.
Our claims hotline is one 24/7: 1-888-641-AHIC (2442).
Freezing temperatures and wind can devastate homes and businesses if proper precautions aren’t taken. Winter temperatures can cause water lines to freeze and rupture, spilling water and causing significant damage to homes. Next to hurricanes, water damage is the most common and costly cause of homeowners insurance claims every year.
What to do before the temperatures drop:
Here are some tips on how to protect your plumbing from freezing temperatures:
Resources: NOLA.com, National Weather Service
A rising Red River covered streets and, in some instances, entered homes in northwestern Louisiana on June 6.
The Red was more than five feet above its 30-foot flood stage in Shreveport and was expected to crest there on June 7 at more than 36 feet.
Caddo Sheriff’s spokeswoman Cindy Chadwick said at least a dozen Caddo Parish homes had flooded — some with at least a foot of water — along the Red or its tributaries. There was flooding reported on major Shreveport area thoroughfares and scattered evacuations in some areas.
“There are other areas where, if you don’t have water in your home, it’s knocking at your door,” Chadwick said.
Chadwick said officials were taking steps to protect water treatment plants and other infrastructure.
Gov. Bobby Jindal has activated up to 200 Louisiana National Guard members to help the state and local emergency effort. The governor’s office says 255,000 sandbags are being distributed in Bossier, Caddo and other parishes along the Red.
An RV park in Bossier Parish has been evacuated. Bossier City officials say ramps from the Shreveport Barksdale Bridge that leads to the Arthur Ray Teague Parkway have been closed because of flooding on the east side of the parkway.
Water is expected to remain high for several days. More above-flood-stage crests are expected further downriver later in the week.
The Red was expected to crest at 38.5 feet on June 9 at Coushatta, more than seven feet above flood stage. At Alexandria, the Red was expected to cause moderate flooding when it crests on June 13 at 38 feet, six feet above flood stage.
Source: Insurance Journal, June 8, 2015.
We’ve all heard the quote, “an ounce of prevention is worth a pound of cure.” And those words certainly ring true when it comes to preparing your home to withstand the often crazy spring storm season. Taking just a few preventative measures now can save you from dealing with substantial damage later.
Now that warmer temperatures are here and homeowners are thinking about spring cleaning and projects around the house, it’s an ideal time to take steps to prevent storm damage to your home. Here are a few tips to prepare for the stormy season ahead:
1. Identify any existing roof or siding problems: A licensed contractor can inspect your roof for missing shingles and possible leaks and do any repair work if necessary. It’s also a good idea to inspect and reinforce any loose siding, which can quickly rip off during high winds.
2. Use shredded bark mulch as landscaping material: If you have rock or gravel landscaping, it’s a good idea to replace it with bark, which won’t cause damage if blown around in high winds.
3. Maintain trees and shrubbery in your yard: Spring is the perfect time to remove dead or weak branches or remove trees that could fall on your home during a storm. Check trees and shrubs regularly to identify potential problems.
4. Ensure gutters aren’t loose or clogged: Clear your gutters of debris and make sure they are tightly attached to your house. Strong winds can quickly tear loose gutters from your home and cause damage. Also, it’s important to make sure downspouts are positioned away from your home’s foundation to help prevent basement flooding.
5. Secure top-heavy furniture: Don’t forget about the inside of your home too. Walk around your house and secure large, top-heavy pieces, such as bookcases, to the wall.
Now it’s time to follow through and take action. We have been fortunate that the last two years have produced quiet hurricane seasons in the tropical Atlantic. And according Colorado State University researchers, this year also looks to be quiet. However, we all know that forecasts are subject to change and it’s always important to be prepared.
Of course, sometimes careful prevention and planning can’t withstand the wrath of Mother Nature. An Access Home Insurance Company policy provides coverage for most severe weather-related losses – other than flooding. A separate policy to cover flood damage is available. If your home does sustain damage during a storm, contact your insurance agent.
For information on our claims process or to submit a claim, visit the Claims page.