Why insurance might not cover billions in hurricane Irene damage
Damage estimates run in the billions for hurricane Irene, but with flooding the main culprit, a majority of damage will be items not covered by insurance claims, experts say.
Hurricane Irene leaves in its wake an economic toll that includes inland flooding, power outages, and costly shutdowns of big-city transit systems.Skip to next paragraph
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Although Irene downshifted to a tropical storm before passing through New York City and beyond, damage could still total more than $5 billion, according to one assessment.
Among the storm's largest effects:
- Floods in inland areas. From New Jersey to Vermont, Irene's torrents fell on a region that had already been saturated by thunderstorms in the week or so before. Many rivers won't crest for 36 hours or so, and important stretches of the Connecticut River not until Wednesday.
- Power outages. More than 5 million homes and businesses were without power from North Carolina to Maine on Monday, with no quick end in sight.
- Lost business activity. Consumers in America's most densely populated region hunkered in their homes instead of going to malls or movie theaters. Although the storm came on a weekend, its effects also spilled into the work week as some transit routes struggled to get running for commuters on Monday.
IN PICTURES: Hurricane Irene
That's a partial list. Other losses include many homes damaged by surging surf or by wind and blown-down trees. Highway 12 in North Carolina was cut in several places. And in Tuxedo Park, N.Y., more than a dozen heating-oil trucks were swept into the Ramapo River as a stream overflowed, The Wall Street Journal reported.
It could have been worse
Despite all the losses, perhaps the most important point is what didn't happen. The region was spared from a much-worse toll due to Irene's weakened wind speeds.
"We were lucky," says Tom Larsen, a senior vice president at EQECAT, a risk-modeling firm based in Oakland, Calif. "It wouldn't have taken much more energy in the winds to really have significantly more far-reaching damage."
As blue sky bathed the Northeast on Monday, millions of residents returned to daily activities mostly as normal.
Insurance companies could breath a sigh of relief: The share prices of firms such as Allstate and Travelers posted sizable gains Monday morning, leaving the stocks little-changed in price over the past 10 days.