NEW YORK (CBSMiami) – As residents in the northeast U.S. begin to assess the damage left by Hurricane Sandy, early estimates are putting the costs at upwards of $20 billion.
Officially, it’s unknown how much the storm may cost the U.S. and individual states.
“The cost of this storm is incalculable at this point,” New Jersey governor Chris Christie tweeted about Sandy. “The devastation on the Jersey Shore is some of the worst we’ve ever seen.”
According to a Yahoo.com report, catastrophe modeling firm Eqecat said it expects insured losses of between $5 and $10 billion. The losses will be on residential and commercial property, energy production, and interruption of business.
Yahoo reported that weather research firm Kinetic Analysis Corp. placed the storm’s costs at roughly $6 billion in insured losses. Eqecat added that flooding, insured by the federal government, could put damage costs in the range of $20 billion.
Hurricane Katrina, with $108 billion dollars in damage is expected to remain the costliest storm of all-time, followed by Hurricanes Ike at $29.5 billion and Andrew at $26.5 billion Dollars.
Still, Reuters reported that while Sandy will likely be the biggest loss the insurance industry faces this year; the industry will likely be able to weather the storm aside from hurting quarterly earnings.
Insurance experts said that Sandy was unlikely to cause any major impact on commercial and reinsurance pricing levels, according to Reuters. Lynne McChristian of the Insurance Information Institute says Sandy’s effect on reinsurance markets should be minimal since much of the damage is from water and that is covered by the National Flood Insurance Program.
In Florida, the losses from Sandy are not expected to impact homeowners because the market is dominated by the state-backed Citizens Insurance and local insurers who only operate in Florida and won’t take any losses related to Sandy.
But, South Dade homeowner Joe Machado said he’s noticed whenever the industry suffers any major loses; he sees his Citizens bill go up as well.
“It’s a fact of life, we’re paying higher rates after Andrew,” Machado said. “Whenever something goes wrong and the insurance companies pay, we pay.”
That’s because re-insurance costs for the industry usually go up across the board, a growing national problem according to industry insider Gayle Bainbridge who explained, “I think it will be very hard for lawmakers to ignore this is a national problem and not just Florida. I see rates rising, with fewer options down here and affordable coverage even more scarce.”
The only “economic rainbow” at the end of the storm may be the billions of dollars from private insurance and federal disaster aid that will soon start pouring into the Northeast It’s expected to fuel thousands of new jobs and years of cleaning up and rebuilding to fix what “Sandys” massive waves and winds tore down in just a few hours.