Hurricane Beryl: Up to $4.5 Billion in Estimated U.S. Insured Losses

U.S. insured losses due to Hurricane Beryl are estimated at between $2.5 and 4.5 billion, according to several catastrophe modeling companies. The storm, which made landfall as a Category 1 hurricane in Matagorda, Texas on July 8, knocked down power lines and damaged property across the state.

Karen Clark & Co (KCC) estimates that Hurricane Beryl will cost insurers roughly $2.7 billion for U.S. losses. “The U.S. estimate includes the privately insured damage to residential, commercial, and industrial properties and automobiles, as well as business interruption,” KCC reports. Furthermore, KCC estimates privately insured losses to be around $510 million in the Caribbean and $90 million in Mexico.

CoreLogic Hazard HQ Command Central updated its estimated industry insured wind losses in Texas to between $2.5 and $3.5 billion, up from its original estimate of between $700 million and $1.5 billion. The estimate was created using CoreLogic’s “wind footprint using available wind observation data,” states the company. “The estimated losses include damage to residential, commercial, industrial, and agricultural properties, including damage to contents and business interruption. The estimate includes demand surge.”

Moody’s RMS Event Response published the highest U.S. estimates, predicted insured losses to fall between $2.5 to $4.5 billion due to wind, storm surge, and precipitation-induce flooding. “Wind and storm surge components for this industry-insured loss estimate are based on an analysis of ensemble footprints in Moody’s RMS Version 23 North Atlantic Hurricane Models, using reconstructions of Beryl’s hazard to capture uncertainties surrounding observed wind and storm surge,” the company states. “Similarly, the inland flood component of the loss estimate was derived using Version 1.2 of Moody’s RMS U.S. Inland Flood HD Model.”

According to Moody’s RMS, Hurricane Beryl holds a number of North Atlantic Basin records, including:

• Easternmost hurricane to form in June.
• Strongest hurricane in June.
• Earliest Category 4 hurricane.
• Strongest hurricane to impact the southernmost Caribbean Windward Islands.
• Earliest Category 5 hurricane.

Insight from CLM Experts

“I would agree that the impacts of the hurricane will be significant,” says William W. Pollock, partner, Ragsdale Liggett PLLC. “Most of the focus typically is on the immediate impacts from damage caused by wind and flooding. However, the true costs will ultimately be higher than the initial damage claims.

“In my practice, I often see construction defect claims for both single family and multi-family units, where several years after a hurricane, the owner is making claims for water intrusion that was caused by the hurricane. Carriers will also face claims for claims that are denied due to policy exclusions for flooding (as opposed to wind driven rain),” Pollock concluded.

Roger H. Nebel and Todd D. Ogden, directors, Maron Marvel, add that Hurricane Beryl’s most striking effects in the Houston area were from wind that resulted in prolonged power outages. “The majority of claims are likely to stem from wind damage to roofs/windows and from toppled trees or falling limbs,” they state. “Additionally, class actions against the electricity transmission company have been announced due to the still-ongoing outages. Beryl also came on the heels of a derecho that hit Houston in May, which may exacerbate prior damage or possibly cause second claims from some insureds.”