RMS Says Hurricane Nicholas Insured Loss Could Reach $2.2 Billion

Hurricane from space

September 28, 2021

Hurricane from space

Catastrophe risk modeling firm RMS estimates total US insured losses from Hurricane Nicholas at between $1.1 billion and $2.2 billion.

RMS said the estimate represents insured losses associated with wind, storm surge, and precipitation-induced flooding, including losses to the National Flood Insurance Program (NFIP).

Hurricane Nicholas made landfall on September 14 near Sargent Beach, Texas, as a Category 1 hurricane with maximum sustained winds of 75 miles per hour. The storm brought hurricane-force winds and prolonged heavy rainfall to the central Gulf Coast, including many areas in southern Louisiana still recovering from Hurricane Ida as well as 2020's Hurricanes Laura and Delta.

RMS estimated privately insured wind and storm surge losses from Hurricane Nicholas at $700 million to $1.4 billion. The total estimate also includes $200 million to $500 million in NFIP losses in Texas and the Gulf of Mexico region.

"A notable impact from this event is the rainfalls, especially in Louisiana, where many towns and cities are still in the early stages of recovery after Hurricane Ida," Jeff Waters, senior product manager, RMS North Atlantic hurricane models, said in a statement. "RMS event response teams estimate roughly 40 percent of postal codes in Louisiana that were impacted by flooding in Nicholas were also impacted by flooding from Ida a few weeks earlier. We expect the overlapping nature of these two storms to further amplify losses, including the risk of rainfall infiltration, and to prolong the claims settlement process."

Losses included in the estimate reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business and consider sources of post-event loss amplification, RMS said. The catastrophe modeling firm said it expects the majority of wind and storm surge losses to come from Texas and the majority of the NFIP and insured flood losses to come from Louisiana.

Hurricane Nicholas was the 14th named storm of the 2021 North Atlantic hurricane season and the sixth hurricane. It was the second hurricane to make landfall this season.

September 28, 2021