Significant losses likely after stormReprints
Emergency personnel focused on safety issues as adjuster teams moved into the Carolinas last week after up to 2 feet of rain caused massive flooding, destruction and at least a dozen deaths, with insured losses being tallied only slowly.
“It appears to be an absolute certainty that the final damage bill is going to be above $1 billion, and most likely a multibillion-dollar economic cost,” said Steve Bowen, Chicago-based associate director of analytics at Impact Forecasting, part of Aon Benfield.
“A key piece to this final cost is going to be infrastructure. We often lose sight of the fact that this type of damage can sometimes be just as costly as property damage,” he said.
In contrast to storms that hit the U.S. earlier this month, the economic cost to the Bahamas from Hurricane Joaquin should be roughly $100 million with insured losses of no more than $50 million, according to one estimate.
The up to 2 feet of rain that caused the Carolinas flooding also led to dam failures that exacerbated the damage.
“Obviously, we'll see an awful lot of flood-related claims on residences,” said Ray Farmer, director of the South Carolina Department of Insurance in Columbia. “We will also have a tremendous number of auto flood claims.
“We will have a number of commercial claims; it's just too early to tell how extensive that damage will be,” he said, citing several commercial buildings that collapsed in Columbia. “We're a long way from getting back to normal, and as a result I think we'll have a number of commercial claims possibly from businesses that have not been able to open.”
“Commercial damage was localized in low-lying areas,” said Chip Timmons, risk manager for the city of Columbia, South Carolina.
Mr. Timmons said he had been in touch with his insurance broker “a couple of times a day” to keep him up to date on city government losses.
“With a flood like this, the actual claims volume coming in will probably start a little bit later because everybody is dealing with life safety issues at the moment,” said Scott Richardson, senior vice president and na- tional property manager with VeriClaim Inc. in Chicago.
He said VeriClaim had established a catastrophe team in Dallas to help adjusters in the Carolinas as more claims are made in the coming weeks.
“There are towns which have some light commercial which is mostly small local business and retail,” said Mr. Richardson.
“I'm unaware of any really heavy loss to industrial or heavy commercial, but that remains to be vetted out,” he said. “But we haven't seen anything on heavy commercial, and we would usually be contacted pretty quickly on that.”
Crawford & Co. had more than 30 adjusters in the Carolinas as of last week, said Bud Trice, vice president of catastrophe services in Atlanta.
“We're still trying to get a handle on the amount of flood coverage in wet areas,” said Mr. Trice.
“This will be a recovery that will take a number of years,” said Mr. Farmer.
Hurricane Joaquin's wrath in the Bahamas was more limited.
“The economic cost for the Bahamas is going to be north of $100 million, but not exponentially higher than that,” said Impact Forecasting's Mr. Bowen. “The Bahamian insurance industry has noted that it does not expect insured losses from this event to exceed $50 million.”
The storm, however, sunk cargo ship the El Faro, claiming the lives of all 33 crew, including 28 U.S. residents.
The ship's owner, Tote Maritime Puerto Rico, issued a statement saying the National Transportation Safety Board was investigating the sinking, and “we promise our full and open participation into the investigation of this tragic accident.”