2020 Hurricanes

According to the state insurance department, insurers have raised their projections of claim costs for three hurricanes that will hit Louisiana in 2020 by 25% since the end of last year.

According to the new round of details from insurers quantifying paid and reserved liabilities through March 31, insurance firms currently plan to pay $9.6 billion on claims of all forms from hurricanes Laura, Delta, and Zeta in Louisiana, up from $7.7 billion at the end of 2020.

Through the first quarter of 2021, policyholders have filed 311,266 claims of various forms related to the three hurricanes. As of March 31, 192,045 lawsuits, or 62 percent, had been settled, with payments totaling $6.9 billion for damage incurred by the three hurricanes.

In a press release, Insurance Commissioner Jim Donelon said, "This data underscores just how destructive the 2020 storm season was in Louisiana." "The rise in reserves confirms what I've been telling policyholders about their claims: they're not a one-time deal. Suppose you discover further damage or higher costs after filing your initial claim. In that case, you will file supplemental claims before your repairs are finished since there is no release available to first-party claims unless there are exceptional circumstances."

Last fall, LDI released a data call requiring all registered property/casualty insurers, including surplus lines insurers, to send data on Hurricanes Laura, Delta, and Zeta in Louisiana at regular intervals until October 2021. Insurance premiums from both personal and commercial insurance are included in the figures.

The actual cost of the three storms is much greater than what insurers have estimated. The statistics from the insurers exclude claims and payments from the National Flood Insurance Program, which the Louisiana Department of Insurance does not control. They still don't account for uninsured injuries or what individuals pay out of pocket to cover their insurance deductibles.

The storm season of 2020 was the busiest in Louisiana's history, with three hurricanes and tropical storms, Cristobal and Marco wreaking havoc. The storm season of 2020 was also Louisiana's second-most costly, trailing only the storm season of 2005. Hurricane Laura has now surpassed Hurricane Rita as the second most expensive storm in Louisiana history, following Hurricane Rita in 2005.

Hurricane Laura policyholders have filed 170,956 claims due to the Category 4 storm that hit Southwest Louisiana on August 27. The storm caused the most damage in Calcasieu, Rapides, Beauregard, Ouachita, and Vernon parishes.

As of March 31, insurers had settled 83 percent of Hurricane Laura lawsuits, with 65 percent of those determined with reimbursement. At the end of March, total paid losses plus reserves on confirmed claims from all surveyed lines of insurance for Hurricane Laura is $8.3 billion, accounting for the vast majority of damage from Louisiana's record-breaking 2020 hurricane season.

Policyholders have filed 85,834 claims due to Hurricane Delta, which made landfall as a Category 2 storm in Southwest Louisiana on October 9. Calcasieu, Lafayette, Acadia, St. Landry, and East Baton Rouge filed the most storm-related charges.

Insurers had closed 89 percent of all Delta claims by the end of March, with 60 percent of those paid shares. As of March 31, insurers had paid or set aside $752.8 million to cover damages from Hurricane Delta claims across all surveyed lines of insurance.

Hurricane Zeta has made landfall in the United States.
Policyholders have filed 54,476 claims due to Hurricane Zeta, which made landfall a powerful Category 2 storm in Terrebonne Parish on October 28. The majority of the allegations originated from Jefferson, Orleans, St. Bernard, St. Tammany, and Lafourche.

As of March 31, insurers had settled 88 percent of Zeta lawsuits, with 54 percent of those settlements resulting in payment. In the most recent estimate, total paid losses plus reserves on confirmed claims from all surveyed lines of insurance totaled $566 million for Hurricane Zeta.