Storm insurance losses from Hurricane Florence may reach $5 billion

Storm insurance - Hurricane from space

North and South Carolina are still in only the earliest stages of gauging the wind and water damage.

Analysts are beginning to attempt to determine what the storm insurance losses from Hurricane Florence will be, even at this early stage. Regions of both North and South Carolina are just getting started in determining the extent of the damage left behind by the massive Atlantic storm.

Early estimates may not necessarily reflect final totals, but the industry is trying to get a hold of the numbers.

Risk Management Solutions (RMS) has now released its own estimates regarding the damage from Hurricane Florence, estimating that the losses covered by storm insurance will reach between $2.8 and $5 billion. That is clearly a large range, but it remains extremely early in the cleanup and recovery process.

In wind damage alone, RMS has estimated that the losses covered by insurance policies will total between $1.3 billion and $2.6 billion. At the same time, there is also inland flooding and storm-surge damage to consider. In those areas, RMS estimates that there will be around $700 million to $1.2 billion in insured damages.

The storm insurance losses must also take the National Flood Insurance Program into account.

RMS also included projections specific to the losses covered by the National Flood Insurance Program (NFIP). According to the global risk modeling firm, those flood insurance totals will likely reach anywhere from $800 million to $1.2 billion.

As high as these totals may seem, these are much lower than what RMS had initially predicted for the storm. Ahead of Florence’s landfall, the firm forecasted that the severe weather’s wind and water would bring between $15 billion and $20 billion in insured losses, said an Insurance Business Magazine report.

While the wind damage brought by Hurricane Florence was significant, it was the heavy rains that truly made the storm uniquely damaging. The rains carried by the storm were far more powerful than what the Carolinas experience, even in the face of hurricanes.

Storm insurance - Hurricane from space“While wind-driven damages will still be sizable, the story of this storm is the flood impacts,” said Mohsen Rahnama, chief risk modeling officer at RMS, when discussing the damage covered by storm insurance. “Florence’s slow-moving nature brought historic rainfall and flooding to the Carolinas.”

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