|
Katrina costs skyrocket
11/09/2005 15:24 - (SA)
New York - The estimated economic cost of Hurricane Katrina rose to $125bn even as the floodwaters continued to recede in New Orleans, as a key industry-data provider raised its assessment of the storm's total economic losses by $25bn.
Risk Management Solutions fell short of issuing any guarantee on Friday that the figure could rise even more, with about 60% of the city still inundated.
"It could take months to drain the water and fully assess the level of structural damage, as well as the contamination in the soil and groundwater," RMS said.
RMS added that insurance firms will likely bump up losses to $40bn to $60bn, up from its earlier estimate of $20bn to $35bn.
The New York-based risk modeling firm estimated that $15bn to $25bn of those insured losses are related to the flooding in New Orleans.
RMS expects at least 50% of the total economic loss from the hurricane to come from the flood, which the firm dubbed the "Great New Orleans Flood".
The final insured loss from Hurricane Katrina will depend on how flood claims are apportioned among the National Flood Insurance Program, private insurers and individuals.
"Distinguishing the portion of damage attributable to wind or flood will be difficult in many areas that were impacted by winds in excess of 100 mph," RMS said in a statement.
The August 29 storm caused levees to break and water from Lake Pontchartrain and other sources to flood the city in the days following the Category 4 storm that slammed into the western Gulf Coast with 145-mph winds.
The floodwaters in New Orleans are receding at a rate of four to six inches a day, but only about 25% of the city's pumps in the local parishes are working due to power outages, according to the Army Corps of Engineers.
"This is the first urban flood that has affected such a vast and industrialised region.
"Without benchmarks, authorities have little experience to inform them of the levels of contamination to expect once the waters recede, or how long it will take before the region can be inhabited again," RMS executive Laurie Johnson said in a statement.
"Ultimately, public-safety concerns will determine when businesses can reopen and residents are allowed to return, even in areas that appear to be undamaged."
- Dow Jones
|
