Gustav damage could reach $10 billion

Estimates would make storm one of the 10 costliest hurricanes in U.S. history - a fraction of Katrina's cost in 2005.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Ellis, CNNMoney.com staff writer

Photos
Solving the energy crisis: You decide Solving the energy crisis: You decide Solving the energy crisis: You decide
As Americans grapple with record oil and gas prices, politicians facing angry voters have offered up a variety of solutions. Tell us what you think.

NEW YORK (CNNMoney.com) -- Hurricane Gustav could inflict as much as $10 billion in damage, making it one of the costliest storms in U.S. history.

Risk modeling firm Risk Management Solutions estimated that Gustav, which made landfall Monday morning in Louisiana, could cost the insurance industry between $4 billion and $10 billion in onshore and offshore losses. That would make Gustav one of the ten most expensive storms the country has ever experienced.

The Newark, Calif.-based firm AIR Worldwide Corp., another risk modeling agency, offered a similar, but more hopeful assessment, predicting that onshore losses alone would only climb as high as $4.5 billion.

Those numbers took into account damage done to homes, offices, factories as well as interrupted business activity, but did not incorporate the impact of flooding.

As Gustav spared the Gulf Coast region however, some firms revised their forecasts. Eqecat Inc. said Tuesday it expected the amount of onshore insured losses to fall somewhere between $3 billion and $7 billion as a result of the storm. The firm initially projected the storm to cause up to $10 billion worth of damage.

It often takes days or weeks after a major storm hits to assess the full extent of the damage.

While staggering, the estimates for Gustav fall far short Hurricane Katrina, which ravaged the Gulf Coast region in 2005, resulting in $41.1 billion in property damage alone, according to the Insurance Information Institute. Adjusted for inflation, Katrina resulted in more than $43 billion in insured damage.

Nor do the estimates for Gustav come anywhere close to Hurricane Andrew, which caused $22.9 billion in damage on an inflation-adjusted basis when it struck Florida and Louisiana in 1992.

Still, those numbers are roughly in line with federally supported computer projections. Gustav could produce $8 billion in property damage, according to a software program used by the Federal Emergency Management Agency and the National Institute of Building Sciences that calculates potential losses from natural disasters such as hurricanes and earthquakes.

By Tuesday morning, forecasters had downgraded Gustav to a tropical depression. Still, the storm is expected to drench parts of Louisiana, Texas, Mississippi and Arkansas through Thursday.

Gustav is just the second hurricane to make landfall so far this year. Hurricane Dolly swept through Southwest Texas in July, causing as much as $600 million in damage according to preliminary estimates provided by Insurance Information Institute.

Now, all eyes turn to Hurricane Hanna, which is currently located in the Bahamas. The Category 1 storm is expected to make landfall along the Eastern seaboard coast sometime Friday. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
For sale: Steve McQueen's 1967 Ferrari The red 1967 sports car is expected to fetch millions at auction. More
The 13 most WTF gadgets From the weird to the gross, these 13 gadgets will make you wonder why they even exist. More
Best-loved cars in America These cars and trucks topped J.D. Power's APEAL survey, which measures how much owners like their new vehicles. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.