Florence loss estimates vary wildly between £2.8bn and $11bn
Risk modelling agencies have been attempting to quantify the losses from Hurricane Florence – but significant variations exist between the loss estimates.
RMS has estimated that the insured loss for Hurricane Florence will be between $2.8 billion and $5 billion. This estimate represents insured losses associated with wind, storm surge, and inland flood damage across North Carolina, South Carolina, and Virginia, including losses to the National Flood Insurance Program (NFIP)
The estimate includes property damage and business interruption caused by wind, coastal flooding, and inland flooding to residential, commercial, industrial, and automobile lines of business. It also factors in post-event loss amplification. The figures also include estimated losses to the NFIP, which RMS expects to reach between $800 million and $1.2 billion.
It expects the overall economic loss from Hurricane Florence to fall between $6 billion and $11 billion. Economic losses, in this case, are losses to all potentially insurable properties, independent of whether they have coverage or not. It does not include items like roads and utilities, and government-owned property, which is often self-insured (or not at all).
Mohsen Rahnama, chief risk modeling officer at RMS, said: “We were fortunate that Florence weakened considerably before making landfall as a Category 1 hurricane. While wind-driven damages will still be sizable, the story of this storm is the flood impacts. Florence’s slow moving nature brought historic rainfall and flooding to the Carolinas.
“Florence is yet another large inland flood event that exposes the protection gap for flood insurance in the US. NFIP take-up rates are less than 1 percent for the vast majority of non-coastal counties in the North and South Carolinas. Thus, we expect much of the losses in interior portions of the region to be largely uninsured.”
However, CoreLogic, the property information and analytics provider, has suggested the flood loss for residential and commercial properties in North Carolina, South Carolina and Virginia will be between $19 billion and $28.5 billion which includes both storm surge and inland flooding. Specifically, uninsured flood loss for the same area is estimated to be between $13 billion and $18.5 billion, meaning insured flood losses would come it at between £6 billion and $10 billion. Wind losses are estimated to be an additional $1 billion to $1.5 billion, it suggested.
This analysis includes residential homes and commercial properties, including contents and business interruption and does not include broader economic loss from the storm.
Corelogic suggested that insured flood loss covered by the NFIP will be between $2 billion and $5 billion.
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