That compares with a projection last week from the Silver Spring, Maryland-based company of as much as $14 billion. Total economic losses, including those that arent insured, may be about $7 billion.
Insurers may get off pretty easy, Charles Watson, Kinetics research and development director, said in a phone interview from Savannah, Georgia. This ones not the straw that broke the camels back.
Estimates of losses declined as Irene weakened from a hurricane to a tropical storm. Insurers may face losses of $200 million to $400 million in North Carolina and South Carolina, according to risk-modeling firm Eqecat. Thats less than the $1.4 billion in insured losses North Carolina sustained from Hurricane Floyd in 1999, one of the costliest storms to hit that state, according to the Insurance Information Institute.
The first initial estimates were that the storm was going to be a lot more severe, Tom Larsen, senior vice-president at Oakland, California-based Eqecat, said in a phone interview. Sometimes they look big and theyre not, and sometimes they blow up really quickly and become a major loss.
Eqecat and other modeling firms hadnt release estimates for mid-Atlantic states, New York and New England as of 6 pm local time on Sunday. Losses in those regions could create volatility in the projections, Larsen said.
Irene struck New York City on Sunday at around 9 am local time with winds of 65 miles (105 km) per hour, before pushing into New England. The storm sent rivers to almost-record heights and knocked out power to more than 4 million customers in 12 states and the district of Columbia. At least 18 people died from Puerto Rico to Connecticut.
Much of the insured flood damage to homes along the coast will be shouldered by a government-run programme, said Kinetics Watson. Standard homeowners policies sold by private carriers dont include that protection. The government also will face costs tied to clearing debris and fallen trees.
Cleanup is going to be about half of the real cost of the storm, and thats a government expense, Watson said.
Insured losses may include hotel and living expenses for policyholders who were forced to evacuate, according to AIR Worldwide, a Boston-based risk-modeler. More than 2 million people were ordered to leave low-lying areas before the storm. The majority of them were in New York and New Jersey, where hotel rates and living expenses are among the highest in the US, AIR said.
Business-interruption claims also can add to insurers costs. More than 10,000 flights were canceled as officials shuttered airports in the New York metropolitan area, the busiest US travel market. The National Association of Insurance Commissioners called off its Summer National Meeting in Philadelphia, scheduled to begin today, after members scrapped travel plans.
State Farm Mutual Automobile Insurance, the largest US house and car insurer, said more than 3,000 homeowners claims and about 670 auto claims had been filed in North Carolina, Virginia, Pennsylvania, New Jersey, New York and Connecticut as of 3 pm on Sunday. Data from Delaware and Maryland wasnt immediately available.
The insurer was receiving reports of downed trees, siding and roofing materials blown off houses, power failures and a lot of claims for loss of refrigerated food, said Jon Hannah, a spokesman for Bloomington, Illinois-based State Farm.