RMS pegs insured losses of up to $2.2bn from Hurricane Nicholas
Catastrophe risk modelling firm RMS expects total US insured losses from Hurricane Nicholas, a Category 1 storm that made landfall in mid-September near Sargent Beach in Texas, to reach up to $2.2 billion.
The estimate reflects insured losses associated with wind, storm surge, and precipitation-induced flooding, including losses to the National Flood Insurance Program (NFIP).
Total insurance losses will fall anywhere between $1.1 billion to $2.2 billion, said RMS. Of this, $700 million to $1.4 billion are expected to come from privately insured wind and storm surge losses based on analysis of ensemble footprints. Losses for NFIP in Texas and the Gulf of Mexico region are likely to be in the range of $200 billion and $500 million.
Losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, and considers sources of post-event loss amplification (PLA). RMS expects the majority of wind and storm surge losses to come from Texas, and the majority of the NFIP and insured flood losses to come from Louisiana.
Nicholas was the fourteenth named storm of the 2021 North Atlantic hurricane season and the sixth hurricane. It was the second hurricane to make landfall this season.
The storm brought hurricane-force winds, prolonged heavy rainfall to the central Gulf Coast, including many areas in southern Louisiana still recovering from Hurricane Ida, as well as Hurricanes’ Laura and Delta (2020).
Jeff Waters, senior product manager for RMS North Atlantic Hurricane Models, said: “A notable impact from this event is the rainfalls, especially in Louisiana, where many towns and cities are still in the early stages of recovery after Hurricane Ida. RMS event response teams estimate roughly 40 percent of postal codes in Louisiana that were impacted by flooding in Nicholas were also impacted by flooding from Ida a few weeks earlier.
“We expect the overlapping nature of these two storms to further amplify losses, including the risk of rainfall infiltration, and to prolong the claims settlement process.”
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