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Though weak, Isaac cost billions

By Jay MacDonald · Bankrate.com
Tuesday, September 18, 2012
Posted: 10 am ET

Slow-moving Hurricane Isaac caused an estimated $1 billion to $2 billion in wind-related losses for commercial and homeowners insurance customers as it stalled over New Orleans last month on the seventh anniversary of Hurricane Katrina, according to disaster modeling firms.

The first hurricane to hit the United States this year, Isaac's approach made headlines when it threatened to disrupt the Republican National Convention in Tampa, Fla. Although it reached New Orleans only as a Category 1 with sustained winds of 80 miles per hour, Isaac's snail's pace provided the first test of the U.S. Army Corps of Engineers' $14.5 billion series of levees, flood walls and pumps installed after Katrina.

Among the disaster modeling firms, Eqecat estimates that Isaac caused $1 billion insured loss to offshore oil rigs and $1.5 billion to businesses and homeowners insurance customers, Risk Management Solutions, or RMS, put total losses at between $1 billion and $2 billion, and AIR Worldwide estimates the onshore loss alone at up to $2 billion.

As we passed the official midpoint of hurricane season last week, 2012 is shaping up to be one of the most active on record. So far, 14 tropical storms have formed, with seven reaching hurricane strength. Hurricane Michael, this season's strongest storm to date that briefly reached Category 3, remained far offshore in the Atlantic.

While 2012 has been every bit as active as forecasters predicted, its impact on land has paled in comparison to 2005, when Katrina devastated the Louisiana and Mississippi Gulf Coast and virtually sank the National Flood Insurance Program, and 2011, which saw widespread hurricane damage to much of the Northeast from Category 3 Irene.

Forecasters predict that the moderating effects of El Nino could inhibit tropical development during the second half of this year's hurricane season. Then again, El Nino was in place in 2004, which nonetheless saw 14 tropical storms, nine hurricanes and six major hurricanes.

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