AIR: Ike Losses Likely From $8 Billion-$12 Billion

Catastrophe risk modeling firm AIR Worldwide Corporation estimated over the weekend that insured losses to onshore properties in the U.S. from Hurricane Ike are between $8 billion and $12 billion, with an expected loss of $10 billion.

Hurricane Ike made landfall at Galveston, Texas at 3:10 am EDT, Saturday, Sept. 13, as a strong Category 2 hurricane. Maximum sustained winds at landfall were 110 mph, just shy of Category 3 on the Saffir-Simpson intensity scale.

Early damage reports include the destruction of several buildings lining the seawall. Several house fires in Galveston burned unchecked as firefighters were prevented from reaching them because of flooded streets and homes across the island are reported to have been damaged by Ike's winds.

“As expected, Houston's high-rise buildings are reported to have sustained major damage to glazing, much like the damage caused by 1983's Hurricane Alicia,” said Dr. Peter Dailey, director of atmospheric science at AIR Worldwide. “Hurricane Ike, which was an extremely large storm at landfall, has been weakening only slowly and has maintained a wide swath of damaging winds. AIR expects wind damage to be widespread, not only along the coast, but also extending well over 200 miles inland from Galveston.”

AIR expects significant damage to mobile homes and light metal construction, such as warehouses. Ornamental features, such as those found on many fast food restaurants, are likely to sustain significant damage. “Single-family homes away from the immediate coast are likely to experience damage to roof coverings and non-structural elements,” continued Dr. Dailey. “Closer to the coast, Ike's winds may breach roofs or windows, leading to structural damage.”

As indicated, AIR expects significant damage to glazing in Houston's high-rise commercial buildings. However, because such buildings are well-engineered and built to stringent code, AIR does not expect significant structural damage. On the other hand, while high-rise apartments and condominiums usually receive a similar degree of engineering attention as high-rise commercial construction, they often have building components that make them more susceptible to windstorms, including balconies, awnings, and double sliding glass doors.

Flooding continues to be a major concern despite the fact that the 20 foot storm surge that the National Hurricane Center (NHC) had warned of failed to materialize. According to information released Saturday morning by the National Weather Service, the highest recorded surge was 13.5 feet, seen at Sabine Pass, TX. Galveston Island recorded an 11 foot surge.

Dr. Dailey continued, “Waves have been crashing over the seawall and flooding has been reported across Galveston Island, including in the city's downtown. Both the east and west ends of Galveston Island are reported to be under water. AIR estimates that the total value of insured properties on Galveston Island alone is about $12 billion, divided roughly equally between commercial and residential construction.” It should be noted, however, that much of the flood damage will not be covered by the private insurance industry.