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Cost of Harvey and Irma damage could hit $70bn, insurer says

The Guardian logo The Guardian 13/09/2017 Julia Kollewe

A Florida house destroyed by Hurricane Irma: A Florida house destroyed by Irma: insurers have estimated that losses from the hurricane could reach $30bn. © Reuters A Florida house destroyed by Irma: insurers have estimated that losses from the hurricane could reach $30bn. The insured damage caused by hurricanes Harvey and Irma is expected to be $50 billion to $70 billion (A$75 billion to A$87 billion), according to the boss of a Lloyd’s of London insurer.

Bronek Masojada, chief executive of Hiscox, said insured losses for Harvey, which resulted in widespread flood damage, were running at $20-$30bn while the cost of Irma was expected to be $30bn-$40bn. Masojada was using estimates from the risk modelling firm AIR Worldwide. A rival risk analysis firm, RMS, estimated insured losses from Harvey could be up to $35bn, which would take the total to $75bn.

The insurer said the claims would make 2017 one of the worst years for natural disasters with the hurricane season not yet over.

However, the scale of the destruction caused by Irma, while vast, was less than had been feared and insurance shares rose on Tuesday.

Estimates had put the total economic cost, which includes uninsured losses, at $200bn to $300bn over the weekend. Masojada said only one in six Houston homeowners had house insurance.

He warned that the price of insuring property would now rise across the US, not just in the worst affected states of Texas and Florida and beyond.

He said: “People buy programmes covering all of their property, wherever they are in America. So [price rises] will be broader than just Texas and Florida.

“It’s only halfway through the hurricane season and we’ve already had one of the most expensive years ever.”

A quarter of the houses in the Florida Keys have been destroyed, while another 65% suffered major damage, the US Federal Emergency Management Agency said on Tuesday.

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