Hurricane results in $5.8 billion in claims in Texas, Louisiana

Hurricane Rita, which damaged or destroyed thousands of homes and other property with up to 120 mph winds, resulted in $5.8 billion in claims in Texas and Louisiana, an insurance group reported last week.

In Texas, the storm resulted in 220,641 insurance claims that totaled $2.8 billion, said Mark Hanna, spokesman for the Insurance Council of Texas. In Louisiana, there were 201,157 claims totaling $2.6 billion.

The number of flood claims for both states was 14,700, totaling $428 million, according to the Federal Emergency Management Agency. There was more flood damage in Louisiana, which had $375 million in claims, compared to Texas’ $53 million.

Hanna said in Texas, Rita is second only to Tropical Storm Allison in 2001 in the amount of claims. Allison, which stalled over southeast Texas for five days and dumped nearly 37 inches of rain, resulted in $3.5 billion in claims, Hanna said.

While Allison was more flood damage, Rita’s primary damage was from winds.

“The primary damage was not just from winds but from trees that fell, these massive pine and hardwood trees in the southeast Texas area. You had them falling through homes, businesses, automobiles,” Hanna said.

Rita landed in Sabine Pass on Sept. 24, 2005, packing 120 mph winds that hit east and southeast Texas as well as western parts of Louisiana. The storm killed at least 11 people in the two states. More than 100 died in the pre-storm evacuation of Houston, in accidents and exposure deaths.

Of the 220,641 claims filed in Texas, there were less than 2,000 complaints filed with the Texas Department of Insurance, which was about 1 percent of the consumers who filed claims. In Louisiana, 895 complaints were registered with the Louisiana Department of Insurance, which represented less than half of 1 percent of the total claims.

“That’s a pretty amazing story,” Hanna said of the number of complaints. “You just don’t normally see that low a number. I’d like to say it’s because of the agents and adjusters who did everything they could to get these people back on their feet as quickly as possible.”

Ben Gonzalez, a spokesman for the Texas Department of Insurance, said any number of complaints is a bad thing.

“It was a difficult time, but in general the industry did a fairly good job of responding,” he said. “We were fairly lucky it was a small geographic area hit by the storm. It could have been much worse as far as the number of folks affected.”

Bobby Ann Clark, a spokeswoman with the Louisiana Department of Insurance, said a recent audit found Allstate, in the wake of both Hurricanes Rita and Katrina, had done well in how it processed initial claims and how it responded before and after complaints were filed.

“The response to the storms was very good on the part of the insurance companies for the most part,” she said.

After Rita, Allstate dropped windstorm coverage to homes in counties directly along the Texas coastline as well property and mobile home coverage in 14 inland counties. State Farm, this year, didn’t renew coverage for 6,000 personal and commercial policyholders along the Texas coast.

The Texas Windstorm Insurance Association, the insurer of last resort for policyholders in Texas coastal counties, paid out $160 million in Rita claims.

Hanna said with more insurance companies not offering coverage along the Texas coast, the windstorm association will see the number of its policy holders increase.