Hurricane Sandy U.S. Insured Losses Hinge On Storm’s Size, Slowness

Worries over potential insured losses from Hurricane Sandy have catastrophe modeling firms focusing on the storm’s massive wind field and the pace it will move through the northeast and mid-atlantic U.S. once it makes landfall.

The storm’s track on Saturday has it moving north in the Atlantic before veering west to landfall somewhere near the New Jersey. As of 8 a.m., the U.S. National Hurricane Center described Sandy as a “very large tropical cyclone” with hurricane force winds that extend 100 miles from its center and tropical force winds that extend 450 miles from the center.

But it’s the storm’s size that has most meteorologists and modelers taken aback as they track the hurricane.

“[It] is important to note that Sandy’s large size – its cloud field stretches for 1600 miles – means that it will inflict high winds and heavy rains over distances well removed from the specific landfall location,” said Dr. Tim Doggett, principal scientist at AIR Worldwide in a statement Friday. “Saturated soils from the heavy rainfall, coupled with the fact many trees still have leaves, could result in widespread tree damage and power outages across wide areas.  The large size of Sandy’s wind field also suggests that the storm surge it inflicts will be significant.”

Modeling form EQECAT said in a Friday statement that as Sandy moves north, its wind field will “greatly expand” and — in many ways — will make it’s exact landfall location inconsequential. “Because of this expansion and spreading out of the core winds, the exact landfall point of the center becomes less important than for a true hurricane,” the statement said.

The storm’s size — along with it’s slow pace — is not unheard of and may figure into a paradigm of tropical storm experience in the northeast U.S. and resulting losses, according to a report issued by reinsurer Munich Re earlier this month.

“[While] a hurricanes maximum wind speed typically weaken as it approaches the northeaster United States, the size of the wind field tends to become larger as it begins to transition into an extratropical cyclone, exposing a larger geographic area to damaging winds,” the report titled Severe Weather in North America when discussing 2011’s Hurricane Irene experience. “A tropical cyclone does not need to be at hurricane intensity to cause widespread wind damage in the northeastern United States,” the report said, adding that most of damage from Irene came from felled trees.

Insured loss estimates for Hurricane Irene were placed at $4.3 billion, according to the Insurance Information Institute.

Insured losses from Hurricane Sandy have already begun to tally, with AIR estimating that total property damage (including both insured and uninsured losses) for Cuba is expected to range from $1 billion to $2 billion and $300 million. Insured losses for the Bahamas are expected to be less than $100 million, AIR added.

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