Property damage incurred as a result of Hurricane Laura’s surge is poised to impact at least 431,810 residential properties with over $88.6 billion in reconstruction costs across Texas and Louisiana, according to data from property analytics provider CoreLogic.
Estimates from CoreLogic were based on the National Hurricane Center’s forecast on Tuesday anticipating the storm to make landfall as a Category 3 storm.
As of Wednesday morning, however, the National Weather Service said the hurricane had already reached Category 3 overnight, and would likely reach a “catastrophic” Category 4 status by the time it makes landfall later Wednesday evening or early Thursday morning. If the storm does indeed escalate to Category 4, up to 496,966 homes could face destruction of $125 billion in reconstruction costs.
At a time when many homeowners are already struggling to make mortgage payments amid layoffs as a result of the coronavirus pandemic, significant reconstruction costs due to severe property damage may tip some over the edge and create a new wave of distressed loans.
“The coincidence of two catastrophes — a damaging hurricane season and the ongoing global pandemic — underscores the importance of the correct valuation of reconstruction cost, one of the core tenets of property insurance,” Tom Larsen, content strategy principal for insurance solutions at CoreLogic, said in a statement.
“Homeowners, mortgage lenders and insurers need to work together to ensure properties are fully protected and insured,” Larsen added. “CoreLogic data has found a correlation in mortgage delinquencies and catastrophes, which could point to a serious issue of underinsurance trends.”
In the event of a Category 4 storm, the Houston metro area stands to incur the greatest property damage, both in terms of number of homes at risk (202,433) and reconstruction cost value ($44.51 billion). Following Houston, Beaumont-Port Arthur, Texas (104,601 properties and $19.16 billion in damage at risk), and Houma-Thibodaux, Louisiana (74,115 properties and $15.29 billion in damage at risk), are poised to incur the next greatest amount of damage.
Track Hurricane Laura on the National Hurricane Center’s website here.
