The price of property damage from Hurricane Ida in Louisiana could be in the tens of billions, but the good news is that much of it is likely insurable, according to CoreLogic.
Initial estimates suggest that residential real estate in the region and surrounding states could reach between $ 9 billion and $ 13 billion for wind damage and an additional $ 5 to $ 8 billion from flooding. That total will cover an estimated $ 5.5 billion to $ 8.5 billion for wind and $ 2.5 billion to $ 3.5 billion for flooding.
Homes were destroyed and submerged in water after Hurricane Ida near Chauvin, Louisiana, USA on Wednesday September 1, 2021. The electricity company that powers New Orleans restored electricity to a small part of the city after Hurricane Ida devastated the area's grid.
Mark Felix / Bloomberg
Commercial real estate is projected to cause $ 9-13 billion in damage from flooding and $ 4-6 billion from wind damage. The insurance is expected to cover approximately $ 3.5 to 5.5 billion for flood damage and $ 2.5 to 3.5 billion for wind damage. The more recent effects of the storm on the New York / New Jersey area have not yet been assessed and have not been included in the total.
The company had previously estimated that 941,392 homes, with a rebuilding cost value of $ 220 billion, could be affected based on the forecast course of the storm.
CoreLogic didn't release revised estimates for the number of households affected or the RCV, but Tom Larsen, director of insurance and space solutions, said during a virtual event Thursday that he generally thinks the latest numbers are more optimistic than previous ones.
"The reality wasn't as bad as predicted," he said. However, it remains to be seen how many houses will have to be rebuilt after the storm.
After the more violent Hurricane Katrina that devastated New Orleans, many damaged homes were not rebuilt in some of the hardest hit areas, noted Shelly Yerkes, senior director of product management at CoreLogic, during the webinar. Other houses were rebuilt according to stricter regulations. Between the relative housing decline in the region and the increased structural solidity, the number of houses that need to be refurbished this time will probably be lower.
"There's just less attention going on in the New Orleans area," Yerkes said during the CoreLogic webinar.
However, New Orleans County is still at the greatest risk of mortgage disruption from Hurricane Ida, ClosingCorp reported separately Thursday. New Orleans has $ 245 million in at-risk transactions, followed by Jefferson ($ 200 million) and Saint Tammany ($ 190 million), according to data from ClosingCorp customers, who make up about 40% of the industry. Overall, ClosingCorp estimates that more than 8,000 home loan applications ranging from $ 1.7 billion to $ 1.8 billion could be disrupted by the storm.
Power outages and the potential need to reevaluate potentially damaged property are among the reasons that ongoing credit tends to be disrupted during hurricanes.