Hurricane Frances damage estimates reduced to US$2-5 billion

Insured loss estimates from Hurricane Frances, which touched down on Florida’s Atlantic Coast and stayed for the best part of the holiday weekend, have been downgraded to US$2-$5 billion by risk modeling firm EQECAT Inc., with overall economic damage potentially topping US$10 billion.The California-based firm says because Frances, which had been a category 4 hurricane at one point, had lost enough force to be downgraded to category two by the time it made landfall, damages are not as high as those resulting from Hurricane Charley. Charley hit the Gulf Coast of Florida in mid-August as a category 4 hurricane, cutting a narrow swath from Tampa to Orlando. Frances, by comparison, was large and slow, and defied early National Oceanic and Atmospheric Administration (NOAA) expectations, notes EQECAT president Rick Clinton. In interview Monday, Clinton notes the storm is far from over, although it had been downgraded to tropical storm status. “It is heading to the panhandle, where flooding should be more of an issue than wind force.” He points to the damage caused by a weakened Hurricane Gaston’s touchdown on Canada’s east coast last week, noting, “a tropical storm can cause pretty severe damage”. For this reason, damage estimates from Frances will continue to be updated as the storm tracks north. Frances first hit land in the West Palm Beach area, but given its incredible size, at points satellite images indicated almost the entire state of Florida was impacted by the storm. The NOAA recorded sustained winds of 100-110 mph. While much of the damage caused in Florida is due to wind speed, it also dumped heavy rains on the state. Another factor adding to the damage total, is the heavy populated in many of the areas affected. The estimates also take into account what Clinton calls “demand surge”, or the increase in reconstruction costs due to the limited availability of labor and material following a disaster. He notes this became a major factor after Hurricane Andrew in 1992, but that state officials are keeping a sharp out eye for abusive pricing today. On the heels of Frances, Hurricane Ivan is also developing in the Atlantic. Clinton notes that having three hurricanes touch down in the U.S. in one year is a rarity, but modelers will be on the watch for Ivan’s progress.