Loss Prevention and How It Was Affected by Hurricane Katrina

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Introduction

Hazards and natural disasters have until recently caused uncountable losses to property and life, with some calamities giving losses in hundreds of billions of dollars. An example is the most damaging flood in United States history, known as the 2005 Great New Orleans Flood or the Katrina. It is estimated that the damages incurred in 2005, by insurance industries, rose to hundreds of billions in United States Dollars. Among the Insurances that gave these figures, include Risk Management solutions, which is one of the leading United States insurance industries. Risk management has been a major concern for multinational industries as well as small-scale businesses. However, this has not been the same in natural disasters, which in most cases come unexpected. The level of progress in calculating risks, as well as loss prevention and management has improved, especially when the risks in question are unnatural. Nonetheless, adequate progressive steps are yet to be taken when dealing with natural disasters like, floods, earthquakes and the likes. These calamities are usually unexpected, and may cause unimaginable amount of damages to properties and lives (ConsumerAffairs 1).

Having said that, it is quite imperative to note that loss prevention is still essential to limiting the level of damage in natural disasters. For instance, Government response to the 2005 hurricane Katrina was intensely criticized for lack of leadership, mismanagement, delays in response, and state of chaos the transpired later, among others. It is believed that if more was done to improve loss prevention, then it is highly unlikely that such levels of losses could have occurred. This paper will try to define loss prevention, relate it to Hurricane Katrina and finally try to bring out the effects of Hurricane Katrina on loss prevention.

Loss prevention

Loss prevention refers to the act of taking positive measures to abate or put a stop to risks that have been identified and when left unchecked, may cause great damages or losses. Loss prevention measures are virtually carried out in almost every institution to avert any unnecessary expenditure as well as for safety purposes. Natural disasters such as floods, earthquakes, lightening, and such like, require immediate response as loss prevention measures. This requires relevant departments and personnel on whose shoulder loss prevention lies to work within their limits to ensure that the least possible damages and loss of lives is incurred. To do this, they require organization, funding, training, preparedness as well as the goodwill in executing such tasks. As it appears, this was not the case or at least according to those who criticized loss prevention process in 2005 (Smolka 1).

Several institutions in the modern world have put in place acceptable loss prevention programs to help raise awareness on safety. Governments throughout the world have provided funding thereby allowing the various states to endow much of their resources and time on loss prevention tasks to mitigate on injuries, losses as well as improve their ways of responding to emergencies. One gets the feeling that, the mentioned number of deaths, at around 1800, with hundreds of thousands displaced as well as a loss tuning to hundreds of Billions, loss prevention was greatly affected. This left a lot to desire of loss management mechanisms, as well as government preparedness to tackling such calamities. Significant improvement in the governments response and loss prevention mechanisms is required to help manage such risks in the future (Smolka 1).

Hurricane Katrina

Also known as, the 2005 Great New Orleans Flood, Hurricane Katrina is considered as one of the deadliest and costliest natural disaster to have occurred in the United States. It is also considered among the five most deadly hurricanes ever to occur in United States soil. It was the sixth strongest hurricane to occur in the Atlantic Ocean and the deadliest in terms of actual hurricane deaths, since Hurricane Okeechobee, which occurred in 1928. Moreover, property loss was nearly three times that of Hurricane Andrew that occurred in 1992. Clearly, this was a deadly natural disaster, which required a well-networked loss prevention mechanism. This risk was unimaginable, let alone the cost of loss prevention and rescue mechanism. Figures given by the United States records confirmed that 1836 people lost their lives in the initial hurricane floods alone; this brings to focus what should have been done to reduce this number, as well as property loss (ConsumerAffairs 1).

This disaster is said to have formed in the Bahamas by 23^rd August of 2005, and then crossed to southern Florida, having caused several casualties. It then strengthened at the Gulf of Mexico before moving to Louisiana six days later. Storm surge caused severe damage to gulf coast, Mississippi beachfronts as well as Texas and significant deaths in Louisiana and New Orleans. The floods went inland for about 12 miles, with boats ramming into buildings and severe destruction of properties witnessed (Barr 2). The levee system, which had been made for hurricane protection, failed to contain this intense flood in New Orleans, causing significant damages and deaths thereby prompting lawsuit against the designers and builders of the levee system. Lawsuits took shape against the federal agency but they could not be held responsible financially due to sovereign immunity (ConsumerAffairs 1).

Further investigations on response mechanisms from the federal states as well as the local government prompted resignation of FEMA (Federal Emergency Management Agency) director. In addition, the New Orleans Police Department superintendent also resigned. On the contrary, National Weather Service, Coast guards, and the National hurricane center were commended for their dealings, which gave accurate forecasts and lead times (Amanda 1). In essence, leads and forecasts were given at their correct times, but the response, leadership, and planning for loss management was greatly affected. Six years down the line, thousands of displaced residents of Louisiana and Mississippi still live in provisional housing as the Army Corps of Engineers try to address reconstruction in the areas (Barr 2).

Effects of Hurricane Katrina on Loss Prevention

Hurricane Katrina greatly affected efforts to salvage lives and properties due to its magnitude and slow response, the following are some of the effects of Hurricane Katrina on loss prevention.

Alteration of Disaster prevention landscape by Hurricane Katrina affected Loss prevention

It is observed that climate, imminent catastrophes as well as cities, among others, are continually altering the disaster prevention landscapes. This makes it increasingly difficult to lay out mechanisms for loss prevention. For instance, the Army Corps Engineers, designed a levee system in New Orleans, most probably based on their perception of the hurricane strengths they expected. However, the pending Hurricane was unknown, the magnitude at which it hit the city was unimaginable and in that respect, loss prevention failed, even though plans had been made to abate the catastrophe. Clearly, it can be seen that something failed (levee system), and deciding on the best corrective measures and loss prevention was not obvious. It then meant that other course of actions had to be taken to assist in rescue operations (The World Bank 42-100).

Policies designed for loss prevention are usually based on a given expectation of the disaster. These policies are formulated based on already marked disaster prevention landscapes, it therefore means that if these landscapes are altered, risk is increased and the focus is diverted. When this happens, there is a high likelihood of witnessing risky behaviors (The World Bank 42-100).

Arguments that Hurricane Katrina was caused by Climate Change greatly affected loss prevention mechanisms

Global warming due to Climate change has overtaken debates in recent discussions, with it s repercussions varying from one researcher to another. Hurricane Katrina is argued to have occurred due to climate change. This is quite instrumental in distracting concentration from loss management policies, in the process mispricing the risks, and facing its consequences, as was seen in Hurricane Katrina. The ambiguity of understanding global warming and its effects have been the main undoing of loss prevention. This is because, when predicted risk is ambiguous, then there is likelihood of underestimating or overestimating disasters and in most cases, when dealing with natural disasters, like Hurricane Katrina. It is therefore quite understandable that even though the forecasts were accurate and leading times available in abundance, the kind of preparation and response for loss prevention was unsatisfactory (The World Bank 42-100).

Hurricane encouraged Overestimating/or Underestimating risks

Residents of riskier areas tend to overestimate risks, while those in low risk areas underestimate. Risk level for inhabitants of New Orleans, and Louisiana, was quite different from those in Bahamas, and Texas. This is because, according to their risk levels, Hurricane was overestimated in some areas than others. Since resources are dispatched based on risk levels, it is quite possible that loss prevention was distracted in allocation of personnel and rescue equipment. In addition, response time is very important as it provides a faster evacuation routes before the condition worsens (The World Bank 42-100).

Economic and Insurance costs of Hurricane Katrina depended highly on response and loss prevention mechanism

Hurricane Katrina greatly affected loss prevention measures since its associated consequences depended greatly on how quickly response would overtake the situation. Unfortunately, the longer it took to drain the warm polluted stagnant water, the less chance it had to achieve its loss prevention objectives. In essence, Loss prevention depended on how fast water could be drained, and rescue attained. This was quite difficult as it took a longer time for water to drain, moreover, its infiltration on the wooden residential houses and properties led to more damages (Smolka 1).

Furthermore, the kind of loss prevention measures that had been put in place in the form of a levee system did not perform its task as was required. It had been designed for category three, strength, while what befell the city was a category four or five. This greatly affected loss prevention measures as it meant a new beginning for the rescue group. Shortcomings in response and preparedness for Hurricane Katrina were exacerbating more failures in loss prevention, negating the efforts made in loss prevention. Loss prevention was therefore; affected by the Hurricane, especially due to the magnitude of the disaster, slow response from federal government, poor maintenance on disaster management facilities and alterations on disaster prevention landscapes, among others (Smolka 1).

Summary

Hurricane Katrina, which occurred in New Orleans, was one of the deadliest to happen in the United States history. Its death toil of 1836 was the deadliest for a natural disaster since Hurricane Okeechobee that occurred in 1928. Moreover, property loss was nearly three times, that of Hurricane Andrew, which occurred in 1992. Loss prevention measures were greatly affected given that response and preparedness was sluggish. Poor maintenance of disaster management systems was instrumental in negating loss management mechanisms. For instance, the levee system that had been put in place to handle hurricane was well short of its needs as it gave way to the Katrina floods, which in turn inflicted severe damages to properties and significant loss of lives (Caruso 1).

Arguments that climate change could have caused hurricane Katrina were on the rise, and this diverted attention from loss prevention policies, which needed to be followed to reduce the repercussions effectively. Moreover, frequent occurrences of natural disasters led to alterations of disaster prevention landscapes, inflicting a heavy blow on disaster estimation, preparedness and loss prevention (Shah 1). Overestimation of risks involved in Hurricane Katrina as well as its underestimation also carried the day in affecting loss prevention and allocation of resources for immediate response. It is therefore quite clear that loss prevention mechanisms were well below its desired levels in dealing with Hurricane Katrina (Caruso 1).

Conclusion

Hurricane Katrina was one of the costliest and deadliest in the history of United States. Slow response, mismanagement, lack of leadership, poor maintenance of disaster management facilities as well as alteration to disaster prevention landscapes, among others, greatly affected loss prevention mechanisms. Several lives were lost and billions of dollars in damaged properties encountered, these would have abated, if an effective loss prevention mechanism had been initiated. This leaves a lot to desire on loss prevention measures in the future, especially when dealing with natural disasters such as flooding, earthquakes and the likes (Shah 1).

Works Cited

Amanda, Ripley. Hurricane Katrina: How the Coast Guard Got it Right. Time Magazine. Web.

Barr, Stephen. Coast Guards Response to Katrina a Silver Lining in the Storm. Washington Post. Web.

Caruso, Kevin. Hurricane Katrina.com: Hurricane Katrina, Hurricane Katrina, Hurricane Katrina, Hurricane Katrina! Web.

ConsumerAffairs. Katrina Loss Put at more than $100 Billion. ConsumerAffairs. Web.

Shah, Anup. Hurricane Katrina. Global Issues. Web.

Smolka, Anselm. Financing the risk from natural disaster. The environment Times. Web.

The World Bank. Natural Hazards, Unnatural Disasters: The Economies of Effective Prevention. NHUD-report. Web.

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