Hurricane Harvey Damage
Texas and Louisiana businesses are still reeling from the recent impact of Hurricane Harvey. Insurance analysts predict the hurricane’s destruction will result in at least $160 to $180 billion in losses. JP Morgan predicts that losses from the hurricane will reach the top 10 most costly hurricanes for the insurance industry of all time.
In context, losses from Hurricane Harvey represent almost 0.8 percent of the U.S. Gross Domestic Product (about $19 trillion). We don’t yet know the full extent of damages from Hurricane Harvey. In comparison to losses sustained from Hurricane Katrina in 2005, we might not see the complete picture of business losses for years to come.
Comparison of Hurricane Harvey to Hurricane Katrina’s Covered and Uncovered Losses
Reports from The Wall Street Journal say that Hurricane Harvey storm damage will exceed the costs of Hurricane Katrina’s estimated $215 billion in losses. Of that amount, approximately $80 billion was covered by insurance. Businesses reported that not all of their Katrina losses were covered by commercial insurance. Insured losses were estimated at about $35 billion.
In addition, Katrina damage reduced oil production in the U.S. by approximately 33 percent. The storm battered energy infrastructure located in the Gulf of Mexico and caused 75 percent of the 819 manned platforms to be evacuated.
According to American Insurance Services Group, Katrina caused approximately $20 billion in business damages and $3 billion in government property. Most of the covered losses were from housing and consumer durable goods.
CNBC reported that losses from Harvey will be greater than or equal to losses sustained from Katrina. The National Flood Insurance Program estimates that approximately 15 percent of Houston had flood insurance. Wind damage from a hurricane is covered by most commercial property insurers but flood damage usually isn’t. Analysts estimate that wind losses related to Hurricane Harvey will exceed $2 billion of insured losses.
Hurricane Harvey Timeline
Hurricane Harvey, a Category 4 hurricane, made landfall in Texas on August 25, 2017. It hit Port O’Connor and Port Aransas with 130 miles per hour winds. It peak occurred on September 1, 2017.
The storm made landfall on three separate occasions in a six-day period. Approximately one-third of the land area in Houston was underwater:
- 24 inches of rain fell in the first day
- Floods forced more than 39,000 people to leave their homes and move to shelters
- Approximately 250,000 people were left without power
- The city of Dallas devised a large shelter for at least 5,000 evacuees at its convention center
- By August 26th, Harvey arrived in Houston and stayed for four days. Two Houston reservoirs exceeded capacity and overflowed. Highways were flooded. Approximately 30 percent of Harris County reported flood conditions:
- Harris County has approximately 4.5 million residents.
- Cedar Bayou, on Houston’s outskirts, reported almost 52 inches of rainfall.
This is a single-storm record for the continental United States.
By August 29th, Harvey made a third landfall and hit Beaumont and Port Arthur Texas at the Louisiana border. The storm left 26 inches of rainfall in a day. Port Arthur, home to about 55,000 people, was flooded:
- About 33 percent of municipal buildings, including the city shelter in Port Arthur, were flooded.
- Beaumont suffered critical drinking water problems.
On August 31st, a Crosby, Texas chemical plant ignited. Harvey disabled the Arkema plant’s coolers and, as temperatures increased, the chemicals ignited. We don’t know the estimated cost of the damages.
By September 1st, Hurricane Harvey reached Nashville, Tennessee, leaving 10 inches of rain.
Estimates from the insurance industry indicate this was the greatest natural disaster in United States history. Governor Greg Abbot has requested at least $125 billion from the U.S. government. Approximately 13 million individuals and businesses in Texas, Louisiana, Tennessee, Kentucky, and Mississippi were affected by the storm.
Houston is Texas’s fourth-largest city. More than 6.5 million people live in Houston. In comparison to country economies, Houston is the 23rd largest economy in the world—greater than that of Sweden or Poland. The impact of the storm will affect the September national employment reports.
As of September 9, 2017, NBC News Dallas Ft. Worth report that at least 70 people died in the storm.
Known Hurricane Harvey Damage
By September 25th, Harvey damaged more than 200,000 homes. Almost 13,000 of these properties were destroyed:
- More than 500,000 people registered for FEMA assistance
- Eighty tractor-trailers delivered emergency supplies
- FEMA moved almost 15,000 people to temporary housing and moved more than 8,000 people to hotels
- Seventy-five schools in Houston (out of 275) were flooded and closed. The Houston school district is the seventh largest in the United States.
- According to USA Today, Hurricane Harvey may have totaled at least a million cars and trucks. Approximately 300,000 of the vehicles were owned by individuals and 700,000 were owned by commercial enterprises or municipal governments.
According to the Washington Post, Harvey flooded 13 Superfund sites as well as at least 800 waste water treatment plants. This spread toxic chemicals and sewage into the flooded area.
Harvey’s Economic Impact Across the U.S.
Gas prices immediate rose after pipelines to the Northeast were reported damaged. Approximately 25 percent of oil and gas production was halted in the Texas and Louisiana area. Prices reached an average $2.49 per gallon by August 31, 2017.
The Wall Street Journal reported that the Department of Energy (DOE) released about 0.5 million barrels of oil in response.
Flood Damages from Hurricane Harvey
Hurricane Harvey was called a 1-in-1,000-year flood. In other words, nothing of the magnitude of Hurricane Harvey has occurred in modern recorded history.
According to Flood Control District meteorologists, about 1.5 feet of water covered almost three-fourths of the 1,800 square miles of Harris County. Houston ground level retreated 2.0 centimeters in the aftermath of the storm.
Commercial Claims in Houston and Throughout Texas
The current total damage in Houston and throughout Texas in the aftermath of Hurricane Harvey is unknown. Geophysicists and others report that the extensive damage from Harvey was unusual because it remained over the Houston metropolitan area for a much longer period than most hurricanes.
It’s important to check your commercial insurance policy for specific coverages. History from the aftermath of other significant hurricanes tells us that businesses may need to fight their insurer to receive the financial protection they paid for. For instance, wind coverage deductibles or limitations in the policy can shift costs to the business.
Take the following steps in reporting your commercial claim:
- Report the claim as soon as possible. Your claim is likely to be handled by the insurer on a first-come, first-served basis.
- Check to determine if your commercial claim is greater than the deductible.
- Write down the claim number for future reference.
- Keep tabs on any repairs or expenses necessary to secure the business premises.
If you can’t return to work at the office, you’ll need to provide the receipts to the insurer.
Contact an Experienced Commercial Claims Lawyer in Houston
It’s more than overwhelming to sort out your commercial insurance claims while you attempt to get back to business. The Mindiola Law Firm offers experienced resources to your business now. Call us at for an initial case evaluation.