Impact of Hurricane Harvey
|A Category 4 Hurricane Slams the Texas Coast then Stays a While
Hurricane Harvey made landfall on the Texas Gulf Coast as a category 4 hurricane late in the evening of Friday, Aug. 24 and hovered in the region for five days, dumping as much as 51 inches of rain in some neighborhoods. Bayous and reservoirs built to shield downtown Houston overflowed as a storm that prompted the national weather service to add a color to rain accumulation scales submerged the nation's fourth-largest city. The storm was unprecedented, and the amount of damage it inflicted on structures that had never before flooded translates to a significant degree of uninsured losses, which will eventually be shouldered out of pocket or by taxpayers. CoreLogic estimated less than half of the properties in the affected area that have a moderate/high risk of flooding were not in special flood zones that are required to have flood insurance. The cluster of issues resulting from Harvey and the emotional and economic losses are staggering, and we endeavor to provide some economic context to frame decisions until official final loss estimates are available.
A complete accounting of the losses associated with Hurricane Harvey will likely take months or even years. Early assessments suggest the storm will be one of the costliest on record in terms of property damage, with large swaths of damages uninsured. While it is still too soon to compile a precise estimate, total losses are likely to be in the ballpark of $90 billion. Damages to homes will likely total close to $40 billion and losses of automobiles other household items will be in the neighborhood of $5 billion. With an economy of more than $550 billion annually, business interruption will likely total at least $28 billion. Adding in damages to commercial property and public infrastructure, the total rises to around $90 billion.
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