As Texas and Louisiana Mop Up, Assessment Begins in Flood-Swept Areas

Preliminary cost estimates of damages wreaked by Tropical Storm Allison as it floated around Southeast Texas for several days earlier this month have topped $1 billion. But no one knows what the actual figure will be nor what the insurance claims impact will be until an assessment of Hous-ton’s losses is complete.

At least 20 lives were claimed by Allison in Houston alone, and reportedly one person died in southern Louisiana. Those losses, of course, can never be assessed in monetary terms.

Allison dumped as much as 30 inches of rain in some areas of Houston. The first named storm of the 2001 Atlantic hurricane season, Allison surprised forecasters and homeowners alike by developing quickly and staying too long. In Allison’s aftermath, Texas Gov. Rick Perry declared 28 Texas counties disaster areas, and President Bush followed suit with a federal designation. In Louisiana, 33 of the state’s 64 parishes were declared disaster zones.

Officials estimated that 30,000 structures in Harris County were inundated by floodwaters. Many of the storm-damaged homes will not be covered by homeowner’s policies, said a Texas Department of Insurance (TDI) spokesperson, since residential property insurance does not cover damage from rising water. Unless homeowners are covered under the federal flood insurance program, they may be out of luck. They will have to rely on low-interest loans available from federal disaster relief agencies. The TDI said some damage to homes from wind and wind-blown rain should be covered. In a departmental release, TDI Commissioner José Montemayor said TDI insurance specialists will soon be dispatched to the disaster areas to assist consumers with their insurance claims.

Thousands of cars, trucks and commercial vehicles were submerged by rapidly rising water. According to TDI, damage to automobiles will be covered as long as policyholders have comprehensive coverage.

Sandra Ray, public affairs director with the Southwestern Insurance Information Service (SIIS), expects at least 50,000 claims to be filed in Houston. Most of those will be auto claims, said Ray, but some will be homeowner’s claims for damage from wind-driven rain. Ray added that, as of June 12, least 35,000 claims had been filed.

Ray said several factors in addition to direct damage to cars will drive the costs up for insurance companies. “There’s a shortage of rental cars,” Ray added, “and people are having a hard time locating their automobiles, because they’ve been towed away. It is the responsibility of the towing companies to contact the cars’ owners, but the longer they stay in the towing lots,” Ray said, the more the price goes up. “It’s a storm that rivals the Oklahoma City tornadoes,” Ray said, “it’s a billion dollar storm.”

The world-renowned Texas Medical Center near downtown Houston, was badly hit. Power outages and flooding necessitated moving hundreds of critically ill patients to hospitals as far away as San Antonio and Austin. In addition, lifetimes of research, along with biological samples, laboratory experiments, doctoral theses and experiment records were lost in the flooding. More than 30,000 laboratory animals are estimated to have died as well.

Losses in the medical center, the central business district and in Houston’s downtown arts district will be difficult to calculate. According to the Houston Chronicle, three of Houston’s major theater venues, Jones Hall, the Alley Theater and the Wortham Theater Center, sustained extensive damage when water covered their lower levels. Thousands of musical scores and several irreplaceable instruments, were among the casualties at the Houston Symphony in Jones Hall. At Houston Ballet, housed at the Wortham Center, an estimated 250 costumes worth between $600,000 and $1 million were damaged or destroyed. And power outages disrupted the PULSE electronic funds transfer network, affecting service to an estimated 76,000 ATMs in 22 states, the Chronicle reported.

“Hundreds of adjusters from across the country are coming to Houston to investigate the claims,” said Ray. It’s likely that they won’t be going home soon.

Topics Texas Flood Louisiana Homeowners