Hurricane damage could top 25 billion dollars

by Brian Turner

Story link: Hurricane damage could top 25 billion dollars

The damage from Hurricane Katrina could amount to over $25 billion, although estimates have ranged from $9 billion to the $25 billion figure.

It could be several weeks before a firm estimate is established, because a great deal depends on how much underwater damage there was to ports and seaways.

The Mississippi River, which enters the Gulf of Mexico at New Orleans, carries a great deal of the exports that leave the US and are shipped to other countries.

Several European insurers and reinsures expect to be hit with claims in the millions of dollars each. Despite the huge losses incurred by Katrina, analysts have downplayed the effect the hurricane might have on insurance premiums, saying that premiums should be affected unless the payouts insurers must make are so large that some could be driven out of business.

That would require a total payout of upwards of $50 billion, according to one analyst. Even then, only storm-affected liabilities, such as properties in the southern United States, would see their premiums rise.