After visiting Galveston last month, I registered concern about living on the island in this post. I never imagined the eye of a deadly hurricane would hit Galveston in my lifetime, let alone one month after my visit.
The reports and television images show near total destruction on Galveston Island. (See the Houston Chronicle here). The estimates for the region's insurable losses range between six billion and eighteen billion dollars. Losses of eight billion dollars would make Hurricane Ike at least the fourth most expensive storm in U.S. history. (Katrina remains number one at $41.1 billion in losses.)
It will be years before the insurance coverage issues are decided, but I doubt the disputes will be as contentious as those arising from Hurricane Katrina. First, damages from Hurricane Ike may be more easily identified with storm surge, or flood, not wind. Second, the insurance companies positioned their adjusters on the scene even before the storm hit to be ready to process claims. This should help resolve the claims and get payments to homeowners sooner than after Katrina where insurers seemingly delayed the processing of claims. Third, there is now a body of case law from the Fifth Circuit sorting out issues related to flood, wind and hurricane coverage.
