November 26, 2012 — In the aftermath of Hurricane Sandy, insurance companies are estimated to be liable for approximately $22 billion in insured losses. This recent estimate was compiled by AIR Worldwide, a company that insurers use to estimates the amount of insured losses after natural disasters.
The estimate is less than half of the $50 billion in total losses. If the estimate is correct, Hurricane Sandy will be the costliest storm to ever hit the Atlantic seaboard, and the second-costliest storm in history after Hurricane Katrina.
Tens of thousands of insurance claims have already been filed, and thousands more are being filed every day. It is likely that the aftermath of Hurricane Sandy will echo Hurricane Katrina, in which many homeowners were shocked to discover that their homeowners insurance did not cover flood damage.
Most of the damage from Hurricane Sandy was due to flooding. In many cases, homeowners in coastal regions had hurricane insurance that will not cover flood damage. Hurricane Sandy was actually downgraded to a Post-Tropical Cyclone just before making landfall, which means that many flood insurance claims will be handled through the taxpayer-funded National Flood Insurance Program (NFIP).