Catastrophe modeler Risk Management Solutions Inc. (RMS) reported on Thursday that Hurricane Isaac's wind and storm surge impacts on the Gulf Coast last month resulted in as much as $2 billion in insured losses.
RMS, based in Newark, California, estimated that insured damage would range between $1 billion and $2 billion, excluding rainfall-driven flood losses and all National Flood Insurance Program losses.
“This estimate includes the possibility of a small amount of loss stemming from so-called coverage leakage, i.e., losses caused by surge inadvertently paid out by wind-only policies,” said RMS in a statement announcing the estimate.
“The width of the range reflects some remaining uncertainties, including the variability and uncertainty around loss at very low wind speeds — mostly tropical storm strength — and, in particular, the uncertainty around coverage leakage of surge-related losses into wind-only loss payments,” said Christine Ziehmann, director of model product management at RMS, in the statement.
Hurricane Isaac made landfall in Louisiana on Aug. 28 as a Category 1 hurricane, near the mouth of the Mississippi River, then made a second landfall of the same intensity near Port Fourchon, La., the next day.