Economic Effects of Hurricane Katrina - Insurance Response

Insurance Response

The Insurance Information Institute reports that Hurricane Katrina was the costliest disaster in the history of insurance. It said that the insurance industry paid $41.1 billion ($45.1 billion in 2009 dollars) and more than 1.7 million claims – across six states. Some 15,000 claims adjusters from across the country were called in to handle the record number of claims for damage to homes, businesses and vehicles. Louisiana accounted for 63 percent of insured losses and Mississippi accounted for one-third. In addition, the federal government-operated National Flood Insurance Program (NFIP) paid out $16.1 billion in claims from flooding. Damage from flooding, including storm surge from a hurricane, is covered by the NFIP, but is not covered under standard homeowners insurance policies. The Institute also said another $2 billion to $3 billion of insured damages occurred at off-shore energy facilities.