Michael insured loss estimates up to $10B: AIR Worldwide

Industry insured losses from Hurricane Michael’s winds and storm surge will be $6 billion to $10 billion, AIR Worldwide, the Boston-based catastrophe modeler, said in a statement Monday.

The figures are consistent with earlier estimates from other catastrophe modelers.

AIR said its modeled insured loss estimates include insured physical damage to property (residential, commercial, industrial, auto), additional living expenses for residential claims and business interruption losses for commercial claims, and for the automobile line. Estimates reflect AIR’s view that insurers will pay for the storm surge damage.

AIR said estimates do not include precipitation-induced flooding; losses paid out by the National Flood Insurance Program; losses to inland marine, marine cargo and hull, and pleasure boats; losses to uninsured properties; losses to infrastructure; losses from extra-contractual obligations; losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event; losses resulting from the compromise of existing defenses; other non-modeled losses, including those resulting from tornadoes spawned by the storm; and losses for U.S. offshore assets and non-U.S. property.

The residential community of Mexico Beach suffered the brunt of Michael’s fury, as the majority of structures in that town were destroyed, primarily by storm surge. At Tyndall Air Force Base, west of Mexico Beach, a wind gust of 129 mph was measured.

“Michael is the most powerful hurricane to have come ashore in the Florida panhandle since the first records were kept in 1851,” Dr. Peter Sousounis, vice president and director of meteorology for AIR Worldwide, said in the statement. “The minimum central pressure at landfall — a key measure of hurricane strength — was 919 millibars, the third lowest on record for a U.S. hurricane.”

Most wind damage was confined to the Florida panhandle and southern Georgia, he said, adding that Michael moved rapidly and precipitation was much less than that of Florence, although some of the areas previously flooded by Florence were already saturated.