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Tags: Hurricane Irma | irma | insurers | nightmare | katrina | losses | cost

Insurers' 'Nightmare' Scenario: Irma Damages May Hit $200 Billion, Top Katrina

Insurers' 'Nightmare' Scenario: Irma Damages May Hit $200 Billion, Top Katrina
(Alan Crosthwaite/Dreamstime)

Saturday, 09 September 2017 04:33 PM

Hurricane Irma headed for an all-but-certain collision with southern Florida after devastating the Caribbean islands and swiping at Cuba as it threatens to become the most expensive storm in U.S. history.

While top winds dropped to 130 miles (209 kilometers) an hour, the life-threatening storm’s swollen size means most of Florida will face hurricane-force winds as it cuts a path through the peninsula into Georgia. Irma, still a Category 4-class storm after it raked the Camaguey archipelago in Cuba at Category 5 strength, was expected to hit the Florida Keys on Sunday morning and head to the state’s southwestern coast that afternoon, the U.S. National Hurricane Center said early Saturday.

“Irma is forecast to restrengthen once it moves away from Cuba, and Irma isexpected to remain a powerful hurricane as it approaches Florida,” the NHC said in an advisory at 8 a.m. New York time.

The storm has already left at least  22 people dead, thousands homeless across the Caribbean and threatens to rack up as much as $200 billion in damages.

“Much of Florida, especially the southern half, is in for a really long and horrible day on Sunday,” said Todd Crawford, lead meteorologist at The Weather Company in Andover, Massachusetts. Another example of “the power of nature on a heavily populated part of the U.S. coastline is imminent, and the costs will be great.”

Mandatory evacuations were issued across Florida, with around 650,000 people fleeing Miami-Dade as part of the largest evacuation the county has ever attempted. The state’s Department of Emergency Management estimated that 5.6 million people in the state have been ordered to leave their homes, Governor Rick Scott said in a statement. President Donald Trump’s Mar-a-Lago estate was evacuated, along with the rest of Palm Beach.

“Prepare for the worst possible,” Trump said Friday as he boarded Marine One, bound for Camp David.

Irma is one of three tropical systems churning in the region. Jose, the third major one of the 2017 season, weakened a little but remained a Category 4 hurricane with sustained winds as strong as 145 miles per hour and is forecast to pass close to or just east of the northern Leeward Islands on Saturday.

Katia weakened to a tropical depression near the Sierra Madre mountains after making landfall in Mexico as a Category 1 hurricane, the NHC said in its latest advisory. The country was struck by a powerful earthquake on Friday, shaking buildings in the capital and triggering a tsunami warning.

Irma’s hurricane-force winds now extend for 140 miles, creating a danger zone that could reach from West Palm Beach on the Atlantic coast to Fort Myers on the Gulf of Mexico. That’s an “insurance industry nightmare” as every county in the state could see damaged roofs and power outages so vast it overwhelms repair efforts, said Chuck Watson, a Savannah, Georgia-based disaster modeler with Enki Research.

Damage could easily top $135 billion in Florida, with other economic losses pushing the price tag as high as $200 billion, Watson said. Preliminary estimates show losses across the Caribbean nearing $10 billion. CoreLogic said 8.5 million properties in Florida may be damaged by Irma’s winds.

Total losses from Katrina reached $160 billion in 2017 dollars after it slammed into New Orleans in 2005.

“Wind damage is totally going to throw a wrench into the insurance industry,” Watson said. “You are talking about companies failing.”

About 9 million of Florida’s 20.6 million people may lose power, according to the state’s largest utility Florida Power & Light Co. Irma may also curb natural gas demand in one of the largest U.S. markets and threaten $1.2 billion worth of crops.

Officials were taking steps to ensure adequate supplies of gasoline after residents filled up cars, boats and back-up generators ahead of the storm.

Irma was 225 miles south of Miami, moving west-northwest at about 12 mph, and after brushing Cuba’s north coast on Saturday is forecast to reach the Florida Keys on Sunday morning and the southwest coast of Florida on Sunday afternoon, the hurricane center said in an advisory at 8 a.m. New York time.

Hurricane-force winds extend outward up to 70 miles from the center and tropical-storm-force winds extend outward up to 195 miles, according to the NHC.

Hurricane and storm surge warnings were extended northward along Florida’s west coast from Anclote River to Chassahowitzka, the NHC said earlier. Southwest Florida may potentially see storm surges of as much as 12 feet from Captiva to Cape Sable, while Ragged Island in the Bahamas may see a surge as large as 20 feet. The Florida Keys may see rainfall of 20 inches or more.

“Irma will continue to bring life-threatening wind, storm surge, and rainfall hazards to portions of the Bahamas and the north coast of Cuba, especially over the adjacent Cuban Keys, through tonight,” the NHC said.

The hurricane comes just two weeks after Harvey smashed ashore in Texas, knocking offline almost a quarter of U.S. oil refining capacity and causing widespread power outages and flooding.

Why We Expect More Havoc From Hurricanes Like Harvey: Click Here

In other storm news:

  • One of the biggest evacuations of aircraft on record is under way as owners move planes out of Irma’s path.
  • Comcast Corp.’s Universal Parks and Resorts division closed three theme parks in Orlando, and Walt Disney World Resort will shut early Saturday.
  • The storm is threatening the two biggest fuel-sucking ports in Florida: Tampa and Port Everglades.
  • Gasoline demand surged in Florida ahead of the storm, and the U.S. is allowing foreign flag vessels to bring in fuel to help with shortages

© Copyright 2021 Bloomberg News. All rights reserved.


Economy
Hurricane Irma threatens to become the most expensive storm in U.S. history as storm damages may reach $200 billion, topping Katrina.
irma, insurers, nightmare, katrina, losses, cost, damage
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2017-33-09
Saturday, 09 September 2017 04:33 PM
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