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Hurricane Delta insured losses may reach $4 billion

Hurricane Delta insured losses may reach $US1-3 billion ($1.4-4.2 billion) after it made landfall in an area still recovering from Hurricane Laura six weeks earlier, catastrophe risk modelling firm AIR Worldwide says.

Delta crossed the Louisiana coastline on October 9 as a Category 2 hurricane with sustained wind speeds of 161 kph. Rainfall totals reached up to 43 cm in some parts of the state’s south-west corner.

The two recent hurricanes made landfall roughly 19km apart, although Delta’s maximum winds were significantly weaker than Laura’s.

AIR says two hurricanes close together can exacerbate impacts to structures already damaged or weakened, although it is also possible buildings that had the potential to be damaged suffered little additional impact from the weaker Delta.

Other examples of tropical storms hitting an area in quick succession include Hurricanes Frances and Jeanne, which affected virtually the same place on the east coast of Florida within six weeks in 2004.

“There were reports of loss amplification at the time, particularly in Florida,” AIR worldwide says. “Given these back-to-back events, the same cannot be ruled out in Louisiana, despite the fact that they are different events and fall under different insurance conditions.”

Property information company CoreLogic estimates total US onshore losses at up to $US1.2 billion ($1.7 billion). It also estimated damage to Gulf of Mexico offshore petroleum platforms at $US800,000-$1.5 billion ($1.1-$2.1 billion).

“Damage from Hurricane Laura extended inland and concentrated on roofs and exterior building cladding, and Delta’s impact could have a double-jeapardy impact,” Principal of Insurance Solutions Tom Larsen said.