Hurricane Michael’s Cost: $25B With up to $8B in Insured Losses
Hurricane Michael will probably end up causing at least $25 billion in economic losses.
About $3 billion of that will fall on the federal flood insurance program and private insurers may get hit with $9 billion to $10 billion in claims, according to Chuck Watson, a disaster modeler with Enki Research in Savannah, Georgia. About half the damage probably won’t be covered by insurance.
Risk modeler Karen Clark & Co. estimated the storm’s cost to insurers at around $8 billion.
That figure includes wind and storm surge damage to homes, cars and industrial and commercial properties covered by private insurers, the company said in a report. KCC estimates that about half of those losses occurred in Bay and Gulf counties. The figure doesn’t factor in losses backed by the National Flood Insurance Program.
Michael is the strongest hurricane to hit the U.S. mainland in decades, leaving thousands without power. Most of the damage came from strong wind speeds and the storm surge depths ranged from 9 to 14 feet along the most impacted area of the cost, KCC said. Storm surge caused $3.7 billion in total damages and about 10 percent of that figure is insured.
The storm made landfall Wednesday in the Florida Panhandle, where most of the damage occurred. The storm brought winds of 155 miles (249 kilometers) per hour, the fourth-strongest hurricane ever to reach the U.S. mainland. It scoured the area near Panama City of trees and knocked down buildings, and has been blamed for at least two deaths.
“Unlike several recent bad storms like Harvey, Florence, Michael is a traditional hurricane event where the most intense damage is in a narrow swath along the coast and along the track of the storm caused by either wind, waves or storm surge,” Watson said.
Most of the damage from Florence and Harvey was from inland flooding after the storms dropped record amounts of rain. Hurricane Florence landed in North Carolina in September and Harvey struck Texas last year – wind played a far less significant role with both of those systems.
Michael will eventually get absorbed by larger weather systems at sea, but some of its energy could reach Europe by next week, said Paul Walker, a meteorologist at AccuWeather Inc. in State College, Pennsylvania.
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