The devestation caused by back-to-back hurricanes in the central Caribbean region has led to insured loss estimates of between $40 billion and $85 billion, according to catastrophe modeling firm AIR Worldwide.
Damage from Maria estimated at $40b-$80b, 85% in PR – FILED
Insured losses after Hurricane Maria are estimated to be upwards of $80 billion in the Caribbean region.
Industry insured losses for Hurricane Maria in the Caribbean are estimated to reach between $40 billion and $85 billion, according to catastrophe modeling firm AIR Worldwide.
Puerto Rico alone accounts for more than 85 percent of the loss, AIR said.
AIR’s estimates include “demand surge,” which is the “increase in the cost of labor and materials that is often observed in the aftermath of major catastrophes,” the firm explained. Demand surge can also come from shortages and constraints in the movement of labor as well as when multiple disasters occur within a short period of time. It then correlates to an increase in the cost of rebuilding that ultimately results in higher insured losses than would otherwise be the case, said the firm.
AIR’s modeled insured loss estimates also include insured physical damage to onshore property, including residential, commercial, and industrial, as well as autos due to wind and flooding, and insured loss to contents, business interruption, industrial facilities and additional living expenses for residential claims.
However, AIR’s estimates do not include losses to infrastructure, hazardous waste cleanup or vandalism. Losses to offshore properties, personal marine vessels and other uninsured properties are also not included in the estimates.
Because Hurricane Maria brought additional destruction to the central Caribbean just two weeks after Hurricane Irma moved across the region into Florida, AIR noted that the region is “in the early stages of what will inevitably be a very lengthy recovery period.
“It is abundantly clear that this has been a major catastrophe for the region,” AIR said.