Losses from the storm could total $30 billion to $50 billion, according to Eqecat, which tracks hurricanes and analyzes the damage they cause. On Monday, before the storm hit the East Coast, the firm estimated $10 billion to $20 billion in total economic damages.There will be insurance payments and rebuilding. That, however, is replacing previously existing property, and revised experience ratings suggest higher insurance premia in future.
The flooding of New York’s subways and roadway tunnels and the extensive loss of business as a result of utility failures across the region were behind the sharp increase in the estimate, the firm said.
Eqecat said it believed that various forms of insurance would cover $10 billion to $20 billion of the total cost. Other losses will be borne by individuals and businesses, or covered by federal government programs like the National Flood Insurance Program. Much of the federal spending will be used to repair damaged public infrastructure, rather than for private property.And some output is lost, for good.
Eqecat said that if insured costs remained at the lower end of its predicted range, at $10 billion, then about 60 percent of the losses would be covered by homeowners’ and, to a lesser extent, auto insurers. The remainder would be covered by commercial and industrial insurance.
Lost Halloween sales will be especially painful for some retailers, according to a separate analysis by Moody’s.So mote it be.
“As shoppers in the affected regions focus on the storm, other discretionary spending will fall and not be recouped,” Moody’s said.