Hurricane Katrina takes US insurance payouts to record $41bn

The devastating Hurricane Katrina will cost US insurers an estimated $34.4 billion (£19.7 billion) in insured property losses, according to new figures.

The storm, which swept through the Gulf of Mexico, was the costliest US catastrophe ever, ISO's Property Claim Services (PCS) unit reports.

The New Jersey risk management firm predicts that the damage cause by the hurricane to homes and businesses in Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia will cost property/casualty insurers considerably more than the inflation-adjusted $20.8 billion bill from Hurricane Andrew in 1992.

Policyholders will lodge a predicted 1.6 million claims for damage to property, vehicles and boats, with an expected $22.6 billion worth of claims from the state of Louisiana alone. The city of New Orleans was worst hit by Hurricane Katrina, with widespread flooding and strong winds.

Insurers are still assessing individual losses and overall scenarios and claims are being settled slowly, as many of the damaged areas still remain difficult to access and claimants have been evacuated.
PCS plans to resurvey insurers in 60 days. The latest estimate does not include losses to utilities, agriculture, aircraft, ocean marine (including oil drilling platforms) and property insured under the federal flood insurance program.