Louisiana flood price tag could hit $15 billion

The devastating floods that hit Louisiana and other parts of the Gulf Coast last month likely caused total economic losses of between $10 billion and $15 billion, according to reinsurer AON Benfield. That would  make it one the costliest natural disasters in U.S. history.

AON Benfield also expects insured losses to be in the low single-digit billions because more than 80 percent of the homes in the affected region lacked flood insurance. At least 13 people were killed in the floods that left parts of Baton Rouge underwater, destroyed 150,000 homes and left thousands homeless.

Louisiana Governor John Bell Edwards (D) is seeking $2 billion in federal aid for his state, which was also hurt by flooding in its northern part earlier this year. The Federal Emergency Management Association has already authorized nearly $200 million in payments for individual assistance, and 20 municipalities, called parishes in Louisiana, have already received federal disaster declarations. East Baton Rouge alone has removed more than a half-million cubic yards of debris.

“The challenge here is not just that we are trying to make our case and bring people up to speed on what happened in Louisiana -- the severity of the flooding -- but there is a timing element,” Edwards told The Advocate newspaper.

That’s because Congress recently returned from a seven-week recess and is expected to go on break again soon until after the November election, in which the presidential race and contests to control the House and Senate will be decided.

According to researchers, the odds of similar floods occurring have increased in recent years because of climate change. Data from the National Oceanic and Atmospheric Administration shows that more than 26 inches of rain fell in Louisiana during one week, with 12 inches drenching the state in just one day.

 “The global warming signal is present in these numbers,” study lead Karin van der Wiel of NOAA and Princeton University recently told the Associated Press. “For a precipitation event of this size to occur on the central Gulf Coast, the odds have increased by at least 40 percent and most likely doubled.”

August was a busy month for natural catastrophes globally. Continued flooding in India, for instance, have killed 600 and causes $462 million in damages. Hurricane Earl caused $250 million in damages after making landfall in Belize and Mexico, while wildfires in California caused more than $100 million in losses.

Hurricane Katrina was the costliest natural disaster for insurers, causing more than $49 billion in damages in 2005 when measured in 2015 dollars. That’s followed by the Sept. 11 terrorist attacks in 2001, which caused $24.6 billion in damages, according to the Insurance Information Institute. At $10 billion to $15 billion, Louisiana’s August 2016 flood could easily land in the top 10 costliest U.S. natural disasters.

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.