Damage from Sandy could cost as much as $50B, says forecasting firm

This Wednesday, Oct. 31 2012 photo shows one of many destroyed oceanfront homes in Mantoloking, N.J. 2012 in the aftermath of Hurricane Sandy. Most of the multimillion-dollar homes along this old-money stretch of the Jersey shore were seriously damaged by pounding surf, wild wind and, in some cases, fire from ruptured gas lines. Numerous homes were destroyed, and some were obliterated, leaving behind just empty sand or maybe a few broken pilings jutting up out of the surf. AP Photo/Wayne Parry

New estimates from forecasting firm Eqecat put the damage from superstorm Sandy at as much as $50 billion, making it the second most expensive storm in U.S. history after Hurricane Katrina.

The new numbers Eqecat released Thursday are more than double the firm's previous estimate.

Eqecat said Sandy may have caused between $30 billion and $50 billion in total economic losses, including 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.

The firm pointed to two reasons that Sandy will leave a bigger bill than it first thought. Power outages are more widespread than in a typical Category 1 storm, Eqecat said. Sandy knocked out electricity for more homes and businesses than any other storm in history, according to the Department of Energy.

On Friday, more than 3.8 million homes and businesses were still without power. At least 92 people in the United States have died, with at least 41 deaths in New York City.

The lack of subway service in New York City and blocked roadways will also push the total cost higher, Eqecat said.

Before the storm hit, Eqecat had estimated that total economic losses from Sandy could range as high as $20 billion and that losses to insurance companies could reach $10 billion. Payouts for insurance claims are typically a fraction of the overall cost to the economy.

If the damages run into the high end of Eqecat's estimates, it would make Sandy the second-costliest U.S. storm after Katrina in 2005. Katrina's overall costs were $108 billion, which would be the equivalent of $128 billion today.

Even after adjusting for inflation, the high end of Eqecat's damage estimates for Sandy would be higher than those caused by previous major storms. Andrew, which struck in 1992, cost $44 billion in today's dollars, and the Ike storm of 2008 cost $32 billion.

Another major firm that calculates the cost of catastrophes, RMS, is gathering information before it makes its first estimate. RMS said Thursday that it has two reconnaissance teams out surveying the damage. The firm has offices in Hoboken, N.J., where floodwaters stranded thousands of people. Forecasting firm IHS Global Insight put the cost of the damage along the coast at $20 billion, plus $10 billion to $30 billion in lost business

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