The major hurricane in the northeast is ruining lives and shutting down industry unlike anything in the last several years. Companies are going to lose billions of dollars in business and entrepreneurs are on edge from the recent storm surge. Even the presidential election may be thrown off track from the devastation. One group that is certainly nervous about these developments is the insurance industry. Even worse for the consumer is that many policies don’t cover wind and flood damage in the way you might think. Victims of Katrina learned this lesson first hand.
Hurricane Sandy’s devastating windy march up the U.S. east coast is expected to cause as much as $10 billion in insured losses, according to a disaster modeling firm.
The storm is expected to hit New Jersey Monday night as a Category 1 hurricane. It has already wreaked havoc, with winds gusting up to 115 miles per hour, pushing water into coastal Virginia, Maryland, New Jersey and New York.
By noon on Monday, high winds from the approaching storm has already cut power lines, leaving 300,000 households and businesses without power, utility companies told CNN.
The catastrophe modeling firm Eqecat expects insured losses to range between $5 and $10 billion. The estimate includes damages to residential property, commercial property, energy production and the interruption of business, according to Tom Larsen, senior vice president of Eqecat.
Weather research firm Kinetic Analysis Corp. estimates the storm will cause $6 billion in insured losses.
Both estimates exclude flood damage. Flooding is insured by the federal government and could push damage costs up to $20 billion, according to the Eqecat analysis.