Tuesday, October 30 09:07:03
The US insurance industry could be responsible for paying for $5 billion to $10 billion in property and casualty claims from Hurricane Sandy, but it has the resources to make the payouts, industry experts said yesterday.Eqecat, a company that tracks natural disasters and estimates their cost, said it expected the storm's total economic damages to range from $10 billion to $20 billion, which includes damage to homes and cars, and business lost because of the storm.
The company said the insurance industry would be responsible for covering $5 billion to $10 billion of that, a smaller amount in part because insurers generally don't cover the flooding of homes and businesses. A federal government insurance program would most likely pick up much of that uncovered cost.
Insurance payouts toward the lower end of the Eqecat estimate would be on par with the $6.4 billion insurers covered in Hurricane Rita in 2005. According to the Insurance Information Institute, the most expensive hurricanes, in inflation-adjusted dollars, were Katrina in 2005, with $47 billion in insured losses; Andrew in 1992, with $23 billion; Ike in 2008, with $13 billion, and Wilma in 2005, at $12 billion, all of it in Florida.
Robert Hartwig, president of the Insurance Information Institute, said the property and casualty industry had the resources to absorb losses estimated for this storm. Until now, the industry had been having a year of minimal losses from natural disasters.