Hurricane Sandy smashed the East Coast with 80 mph winds and record storm surges on Oct. 29, 2012. The storm killed more than 90 people as it destroyed homes and businesses and left millions without power. Nearly a week later, residents are still reeling from Sandy’s devastation.
Widespread power outages and subway shutdowns may make Sandy the second most expensive storm in U.S. history after Hurricane Katrina.
Insurance adviser Eqecat said last week that damage from the superstorm will likely be far worse than it previously predicted, as Sandy hit the country’s most densely populated area. The firm doubled its previous damage estimate, now believing that Sandy may have caused between $30 billion and $50 billion in economic losses. The total destruction includes property damage, lost business and extra living expenses. The cost to insurance companies could run as low as $10 billion and as high as $20 billion.
Eqecat’s new estimates align with an earlier estimate from IHS Global Insight, which said Sandy could cause $20 billion in property damages and $10-30 billion in lost business.
The bill is larger than Eqecat first surmised because the power outages are more widespread than in a typical Category 1 storm. According to the Department of Energy, Sandy knocked out electricity for more homes and businesses than any other storm in history. The lack of subway service in New York City and blocked roadways will also push the total cost higher.
Damages reaching $50 billion would make Sandy the second-costliest U.S. storm after Katrina (2005), which cost $108 billion. Figuring inflation would make Katrina $128 billion today. For further comparison, the 1992 storm Andrew cost $44 billion in today’s dollars, and 2008 storm Ike cost $32 billion.
RMS is another major firm that calculates the cost of catastrophes. The firm has offices in Hoboken, N.J., where floodwaters stranded thousands of people, but employees are now out gathering information for an estimate.
Eqecat’s estimates cover only private losses. The government covers much of the losses through the National Flood Insurance Program administered by the Federal Emergency Management Agency (FEMA).
Matthews & Associates, from its Houston and New York offices, is poised to help victims of Hurricane Sandy receive all they deserve from the companies which insured them.