Hurricane Irma: Insured losses projected up to historic $65 billion

Sept. 09--Much depends on its path as Hurricane Irma approaches Florida, but a catastrophe modeling firm projected Saturday that insured losses could range from $20 billion to $65 billion in the U.S. and Caribbean, making it a contender for the most expensive in U.S. history.

Human life and safety remains the top priority for all in the path of a dangerous storm already blamed for at least 23 deaths, but U.S. insured losses alone could range up $50 billion, AIR Worldwide said in a statement.

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The estimate was based on the forecast track as of early Saturday, though a lot could change in the next 24 to 48 hours. Any change would affect which parts of the state take the brunt of damaging winds, storm surges and other devastating effects. A shifting forecast track has been putting the state's west coast and possibly Panhandle at greater risk, though dangerous winds, tornadoes, heavy rain and other risks are expected to affect virtually the whole state.

The Boston-based firm noted close to 80 percent of the total insured value in Florida is located in coastal counties, "where the amount and value of exposure has been growing significantly for decades."

AIR said its loss estimates for the U.S. include wind and storm surge damage to onshore residential, commercial, and industrial properties and their contents, automobiles and insured business-interruption expenses and temporary living expenses for residential properties.

Hurricane Katrina in 2005 cost $41.1 billion in insured losses, according to the Insurance Information Institute. Adjusted for inflation, that was $49.8 billion in 2016 dollars. Much like AIR's projections, that figure excludes considerable costs not covered by private insurers, such as flood damage covered by the National Flood Insurance Program, uninsured losses, and government aid payments.

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By comparison, Hurricane Andrew in 1992 cost $15.5 billion in insured losses at the time and $24.5 billion adjusted for inflation, according to the Insurance Information Institute.

Hurricane Sandy in 2012 produced $18.8 billion in insured losses, or $19.9 billion after inflation.

It is too early to know the full costs of Hurricane Harvey in Texas, but it and Irma are likely to emerge as the costliest on record for a one-two combination in the same season.

The immediate concern is making sure people are as safe as they can be, but state officials said they are taking steps to be prepared for what comes afterward, including rescue efforts, recovery and insurance claims.

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"As Hurricane Irma moves closer to Florida's shores, we're already taking steps and making plans to assist Floridians with post-storm recovery," Florida Chief Financial Officer Jimmy Patronis said Saturday. "We're putting search and rescue assets in place, and readying our insurance experts to hit the ground running to help consumers with their post-storm claims. I urge all Floridians to finish their final preparations and prepare for Irma's imminent landfall."

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