Insurance News

Nor’easter Caused Up To $750M In Insured Damage In Connecticut, According To Early Estimate

Posted on: November 7, 2011

Connecticut suffered $500 million to $750 million in insured damage during last weekend’s nor’easter, according to an early estimate provided by the Connecticut Insurance Department.

That’s 20 to 25 percent of the total insurance-covered damage of $1 billion to $3 billion caused by the storm that dumped snow from Maryland to Maine. Damage covered by insurance is an unknown fraction of total economic losses.

“We cannot be certain until the adjuster/claims information are reported by the companies,” said Insurance Department spokeswoman Debra Korta. It’s not clear what the total economic loss will be in Connecticut.

“Snowstorms are harder to forecast damage from than hurricanes since you’ve got the ice/snow component on top of the wind/rain elements,” said Chuck Watson, director of research and development for Kinetic Analysis Corp. of Silver Spring, Md.

“My personal estimate is that this storm will be over $1 billion in total economic impact, the 11th natural disaster to cross that threshold in the U.S. this year,” Watson said. “$3 billion in total damage and impact would not totally surprise me, but it shouldn’t be over that. … These numbers are professional judgment, not model estimates.”

The Insurance Department released the estimates Wednesday based on preliminary damage assessments by Kinetic Analysis Corp. and the Insurance Information Institute. Catastrophe-modeling companies such as EQECAT Inc. and Risk Management Solutions, which often estimate the cost of more expensive disasters, had not put a dollar figure on the storm as of Wednesday afternoon.

“Delays are occurring in the reporting of claims since many are still without power,” Korta said. “People are still focused on staying warm, protecting their property, removing trees and getting power restored. Once all of this happens, it is expected that more claims activity will occur.”

Tropical Storm Irene — which was a category 1 hurricane when it made landfall Aug. 27 near Cape Lookout, N.C., and maintained hurricane-force winds through a second landfall on Aug. 28 at Little Egg Inlet, N.J. — caused an estimated $2 billion to $4.5 billion in insured losses, which didn’t include flood damage, according to Risk Management Solutions, RMS. That doesn’t include an extra $500 million to $1 billion damage in the Caribbean, mostly in the Bahamas, RMS has said.

EQECAT estimated Irene caused $2.8 billion in insured losses, but the company said economic damage could be in excess of $10 billion.

Another modeling company, AIR Worldwide, estimated that Irene caused $200 million to $400 million in insured damage in the Bahamas and $3 billion to $6 billion in the U.S.

Copyright © 2011, The Hartford Courant

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