Hurricane Laura’s Insured Losses Estimated between $4B to $9B

The storm brought catastrophic winds, storm surge of approximately 15 feet and widespread heavy rain along the Texas and Louisiana coast.

(Louisiana National Guard members help clear roadways and assess damages on Aug. 27, 2020, in Lake Charles, Louisiana after Hurricane Laura made landfall the night before.  Source: Louisiana National Guard.)

Last week Hurricane Laura tore through the Caribbean, making multiple landfalls in Antigua, the Dominican Republic and Cuba before arriving as a Category 4 Hurricane on the mainland U.S. on Aug. 27. The storm brought catastrophic winds, storm surge of approximately 15 feet and widespread heavy rain along the Texas and Louisiana coast. Insured loss estimates range from $4 billion to nearly $9 billion, mitigated by the location the storm came ashore.

Comparisons have been made between Hurricane Laura and 2005’s Hurricane Rita. However, they differ in two important ways, according to Cagdas Kafali, SVP, research, AIR Worldwide (Boston). “Rita was a larger storm and hit a more populous area than Laura did,” he observes. “Rita made landfall west of where Laura did, impacting population centers of Texas; Laura made landfall well east of Houston and west of New Orleans, keeping losses lower.”

Cagdas Kafali, SVP, Research, AIR Worldwide.

Tropical Storm Laura formed on Aug. 21 as it approached the northern Leeward islands, according to a statement from Karen Clark & Company (KCC, Boston). The storm crossed over Antigua before continuing along the northern Caribbean Islands. Early forecasts suggested Laura would track north of the Greater Antilles and impact the Bahamas, but the storm took a more southerly route, passing just south of Puerto Rico before making landfall in the Dominican Republic on Aug. 22. After affecting Hispaniola, the storm then crossed the southeastern coast of Cuba, tracked along Cuba’s southern coast, and passed over northeastern Cuba before emerging into the Gulf of Mexico on August 25th. Despite land interaction with mountainous terrain of Hispaniola and Cuba, warm sea surface temperatures (SSTs) enabled the storm to retain its tropical storm status.

Maximum Sustained Winds of 150 mph

At 2:00 AM EDT on Aug. 27, Laura made landfall in Cameron, Louisiana, with maximum sustained wind speeds of 150 mph, according to a statement from, KCC reports. The storm traveled north and maintained major hurricane strength until it reached Lake Charles. The storm decayed to a tropical storm later that night. By the next day, the weather system was a tropical depression over Arkansas and then transitioned to an extratropical low as it continued east across the U.S.

In the Caribbean, Laura’s storm force winds caused light damage to roof covering and other exterior structures, with most structural damage caused by downed trees, according to KCC. Because the storm strengthened as it approached the U.S. mainland, major hurricane force winds impacted an area along the western Louisiana coast, and as far inland as Lake Charles.

Hurricane Laura on August 26, 2020. Source: NOAA. (Click to enlarge.)

“Structural damage has occurred to all types of properties, including wood frame homes and commercial structures,” the KCC statement says. “Damage to roof coverings, decking, and trusses has been widespread. Exterior siding, opening, and glazing damage have been extensive, and typically followed by progressive damage from water and wind infiltration. In addition to downed trees and signs, telephone poles have snapped, resulting in infrastructure disruption.”

Laura struck the Louisiana coast with sustained winds of nearly 150 mph (241 km/h), tying it with the 1856 Last Island hurricane in terms of the strongest recorded tropical cyclone to make landfall in Louisiana, according to AIR. Laura’s rapid intensification over abnormally warm Gulf waters was similar to Hurricane Harvey (2017) and Hurricane Michael (2018), the other two most recent Category 4 or stronger storms to hit the U.S.

Wind Damage Greatest in Louisiana

Wind damage was greatest in Louisiana, particularly in areas closer to the eyewall near landfall, AIR reports. Preliminary maximum wind reports from the National Weather Service (NWS) reported 133 mph gusts at Lake Charles in Calcasieu Parish. Reports show damage from torn off roofs and façades to structures that were destroyed, along with upended vehicles, damage to power lines, roads, railways, and other infrastructure.

Laura’s winds diminished after landfall but remained at hurricane strength for nearly half the day, pummeling the region for hours as the storm’s center traversed north through Louisiana, AIR’s statement says. The hurricane’s storm surge was not as severe as expected, as the storm tracked somewhat to the east of the Calcasieu Ship Channel, a waterway that connects the town of Lake Charles with the Gulf of Mexico, and pushed less water forward. The highest storm surge recorded thus far was around 15 feet above sea level (NAVD88), measured at a USACE river gauge on the Mermentau River at Grand Chenier in Cameron Parish County, Louisiana.

“Residential buildings in and around Lake Charles saw significant damage to roofs of all geometries and with various roof cover types,” adds AIR’s Kafali. “Residential building envelopes were breached due to debris impacts and the damage was further exacerbated in many cases due to the impacts of storm surge. Residential homes in Louisiana are founded primarily on crawlspace and slab foundations, both of which are vulnerable when it comes to flood damage.”

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Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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