18th October 2020

AIR Worldwide estimates insured losses to onshore property from Hurricane Delta will range from $1bn to $3bn

AIR Worldwide estimates that industry insured losses to onshore property resulting from Hurricane Delta’s winds and storm surge will range from $1bn to $3bn.
Hurricane Delta made landfall on 9th October near Creole, Louisiana, as a Category 2 storm with sustained wind speeds of 100 mph and a central pressure of 970 mb. Delta brought strong winds and storm surge to coastal communities, mainly in southwestern and south-central Louisiana. The southwestern corner of Louisiana was also hit with heavy rainfall, up to 17 inches in some places.
According to AIR, Hurricanes Laura and Delta made landfall roughly 12 miles and six weeks apart. Strong winds from these storms impacted areas in common, including mainly the coastal area of Cameron Parish and Lake Charles and environs, although Delta’s maximum winds were significantly weaker than Laura’s. AIR’s modelling approach assumes independence between these events, which is reflected in the published loss range. Given that the two events affected the same area within a relatively short period of time, however, there are several aspects worth noting.
Before Delta made landfall, aerial imagery showed that many structures in these areas had blue tarps on their roofs; after Delta many of these structures still had blue tarps on their roofs. On the one hand, wind-driven rain and wind-borne debris impacts following Delta could have exacerbated the damage caused by Laura to these properties. Furthermore, structures that may have been weakened by Laura’s winds may have been further damaged by Delta, despite its moderate winds. On the other hand, it could be posited that structures that had the potential to be damaged were already damaged by the relatively-stronger Hurricane Laura, and therefore, not much was left to be damaged by Delta.
It is important to note that two hurricanes impacting the same area within a short period of time is not a new phenomenon; in 2004 Hurricane Frances and Hurricane Jeanne both impacted virtually the same place on the east coast of Florida within six weeks of each other. There were reports of loss amplification at the time, particularly in Florida; given these back-to-back events, the same cannot be ruled out in Louisiana, despite the fact that they are different events and fall under different insurance conditions.
Large surge occurred far east of Delta’s Creole, Louisiana, landfall because of the storm core’s elliptical shape, featuring a huge eye elongated in the east-west direction. Compared to Laura, the maximum surge elevation of Delta was lower, except in southern-central Louisiana from Freshwater Canal Locks eastward to Morgan City, including Vermillion Bay and nearby bays, where surge inundation was most impactful. The parishes more heavily impacted by Delta were farther east than those more heavily impacted by Laura.
According to AIR, the storm flooded and blew tarps off homes and businesses already damaged by Laura and blew shingles off roofs that had not been impacted by the previous storm in the vicinity of landfall, the coastal area of Cameron Parish, and to the northwest, including Lake Charles. The storm also blew shingles off roofs in these areas that had not been impacted by Laura, including Lafayette and environs.
Included in AIR’s estimates are losses to onshore residential, commercial, and industrial properties and automobiles for their building, contents, and time element coverage.

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