Sandy insured losses may hit $20 billion

Nov. 1, 2012 at 5:05 PM
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NEW YORK, Nov. 1 (UPI) -- Insurance companies may have to pay out as much as $20 billion to cover losses from Hurricane Sandy, a U.S. catastrophe-risk modeling firm said.

Eqecat Inc. said insured losses will probably amount to $10 billion to $20 billion, and the total damage including uninsured property could be $30 billion to $50 billion.

Wall Street analysts had estimated insurers would have the resources to cover losses from Sandy, which is being blamed for at least 88 deaths in the United States and is shaping up as second only to Hurricane Katrina in 2005 as the most destructive storm to hit the United States, The Wall Street Journal reported Thursday.

However, damage estimates have climbed steadily during the week -- with Eqecat estimating Monday insured losses could amount to between $5 billion and $10 billion, while AIR Worldwide estimated Tuesday insured losses would total between $7 billion and $15 billion, the newspaper said.

Insured losses from Katrina came to $41.1 billion. Hurricane Andrew in 1992 caused $15.5 billion in insured losses -- which would amount to about $23 billion adjusted for inflation, the Insurance Information Institute said.

More than 100 municipalities where federal emergencies were declared this week have the lowest ratings from the federal government under a program that rewards communities for trying to minimize flood damage, USA Today reported.

The program gives residents of communities that take flood-prevention action higher discounts on their insurance premiums.

However, coastal New Jersey communities, such as Sea Bright, Lacey, Barnegat and Ocean Township, get no discounts because they took either minimal or no flood-prevention action, federal records show.

"This is not a difficult thing to do," said Larry Larson, senior policy director for the Association of State Floodplain Managers.

The incentive program "is one of the best things we have," he said.

"A lot of communities aren't doing it because they say, we have to do the work and the individuals are the ones getting the benefit," Larson said. "There are a lot of property owners who don't know the [incentive] program exists."

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