The devastation caused by Hurricane Ike has created an insurance nightmare for residents and business owners from the Gulf Coast to the Great Lakes.
As damage assessments continue a week after Ike tore a path of destruction across the country, homeowners and business operators hope their insurance coverage will help them rebuild their homes, their businesses and, most importantly, their lives.
The biggest hurdle they face when dealing with their insurance carriers is what came first--wind or water? Determining the answer can be critical for many homeowners who often are only insured against damaging winds, not storm surge that causes water damage.
Forensic meteorology plays an important role in determining the timing of the wind and storm surge in relation to the extent of the damage caused by a storm.
Shortly after Hurricane Katrina devastated the Gulf Coast in 2005, AccuWeather Certified Consulting Meteorologist Stephen Wistar conducted an investigation in a Louisiana community before the debris was completely removed or re-arranged.
Forensics Team were able to determine that tornadoes struck several neighborhoods hours ahead of storm surge flooding.
"With Ike, as was the case with Katrina, people evacuate and return to find a damaged or destroyed property," says Wistar. "They don't know in what order it came apart. In Katrina, we reconstructed a detailed time-line of the storm surge and wind, hour-by-hour, to help tell the story of what happened with the weather at a specific address."
A 14-foot storm surge from Ike obliterated much of the Bolivar Peninsula and Galveston Island, while wind and rain damage was more prevalent in Houston and other areas reaching as far as Michigan, Ohio and western Pennsylvania.
Catastrophe risk experts have estimated onshore and offshore insured losses from Hurricane Ike could be as much as $12 billion, while New York-based Deloitte LLP estimated total insured losses, including the National Flood Insurance Program, could reach $20 billion to $25 billion.
Insurance companies on Thursday reacted angrily to comments made by Homeland Security Secretary Michael Chertoff during a tour of a FEMA staging area in Beaumont, Texas.
Chertoff told reporters that insurance comes first, FEMA second.
Debris is scattered around a restaurant in Crystal Beach, Texas on the Bolivar Peninsula. The small coastal town of nearly 1800 residents suffered catastrophic damage in the wake of Hurricane Ike. (AP Photo/Tony Gutierrez)
He said insurance companies need to, "step it up a little bit. And if they're listening, I'd like to light a little bit of a fire under them to make sure they do that."
Industry officials blasted the comments, saying they are more than on the ball. Several companies have moved mobile claims centers into Southeast Texas. Farmers Insurance spokeswoman Michelle Levy told the Beaumont Enterprise that over 1,000 claims handlers from all over the country are in 10 areas affected by Ike.
In a conference call, FEMA spokesman Marty Bahamonde said the agency does not duplicate benefits given by an insurance company. "A lot of people are covered by insurance. We want to make sure that their insurance company takes care of them first."
Bahamonde added that after dealing with their insurance carrier, someone who is under insured or has home damage can file a claim with FEMA.
Residents who lived in the devastated coastal communities may never be able to return to their homes. According to the Associated Press, a little-known statute called the Texas Open Beaches Act could allow the state to seize houses sitting on any beach between the average high-tide line and the average low-tide line.
Since the law was passed in 1959, the state has seized homes that suddenly sat on public property after a storm eroded the beach. The erosion caused by Ike could lead to the biggest use of the act since its passage, and the most extensive since Hurricane Alicia in 1983.
Texas General Land Commissioner Jerry Patterson says it will be a year before any homes are condemned as authorities use the time to watch the sea and analyze the exact tide lines.
The oil and gas industry continues to assess the damage from Ike. The Minerals Management Service reported Thursday that at least 49 offshore oil platforms were destroyed. The platforms produced 13,000 barrels of oil and 84 million cubic feet of natural gas a day.
AP reports that 12 of the 31 oil refineries in Texas and Louisiana remained shut down as of Thursday afternoon, while many others are operating at reduced capacity.
Power is slowly coming back on line from Texas to the Ohio Valley. The U.S. Department of Energy reported Thursday that 2.44 million remained without power in six states, including 1.6 million in Texas, more than 500,000 in Ohio and nearly 200,000 in Kentucky. The DOE report says most customers in Illinois, Missouri and West Virginia have service.