Without insurance, Harvey’s victims turn toward the state

With flooded houses, totaled cars, downed power grids and damaged infrastructure, rebuilding from Harvey, which struck southeast Texas and part of Louisiana, will require large-scale mobilization.

According to the White House, some 100,000 households have been affected by the disaster. Analysts have offered damage estimates varying from $30 billion to $100 billion.

Chuck Watson of the disaster modelling firm Enki Research told AFP on Friday there was a great deal of uncertainty surrounding estimates so soon after an event of this scale.

“Normally at this point we would wait about a year and then come back and see how well the models did,” he said.

In a final research note published Thursday, Watson said his median estimate for economic and property damage was $78 billion, which would make Harvey second only to 2005’s Hurricane Katrina in terms of cost. By Watson’s calculation, that storm had a cost of $118 billion.

A German team of experts on natural disasters said Thursday that for Texas alone the damages should rise to $58 billion.

But in federally designated US flood zones, only 12 percent of home owners are covered by flood insurance, according to the Insurance Information Institute. In the South, this figure rises marginally to 14 percent.

US homeowners insurance policies typically do not offer flood protection and, with current flood maps widely considered obsolete and inaccurate, Watson estimates that about two thirds of Harvey’s damage occurred outside such zones.

– Celebrity donations –

Victims are thus at the mercy of the Federal Emergency Management Agency, which also manages the National Flood Insurance Program.

“FEMA has received more than 427,000 registrations for assistance,” an agency spokesperson told AFP.

“More than 117,000 individuals and households have been approved for more than $76 million in assistance.”

Policyholders have submitted 51,000 claims under NFIP in Texas, the spokesperson said, adding that claimants can be eligible for advance payments of $5,000 to $10,000 prior to an adjuster’s inspection.

Media reports have highlighted however the immense $24 billion debt carried by NFIP, which pays out more in claims than it receives in premiums, casting doubts on the program’s ability to cover damages.

White House officials said this week Trump would ask Congress for an initial $5.9 billion aid package with more to come in the following weeks.

Following Katrina, lawmakers approved $100 billion in reconstruction assistance. That storm left some 1,800 people dead.

Celebrities, including Beyonce, a Houston native, and the actress Sandra Bullock, as well as the Houston football player JJ Watt, have also announced donations to help Harvey’s victims.

Texas technology billionaire Michael Dell and his wife Susan on Friday also announced personal donations of $18 million toward a Texas reconstruction fund. Likewise, the National Basketball Association has announced a $1 million donation.

President Donald Trump, who is due back in Texas on Saturday, has likewise pledged a $1 million donation.

Beyond the immediate damage, economists at Barclays said Friday that Harvey could shave between one percent and 1.5 percent off of US economic growth in the third quarter.