Modeling Firms Release Initial Ike Estimates

Based on the estimated insured loss averages released by three major risk modeling firms over the last several days, Hurricane Ike could rank as the third-costliest storm in history, behind only Hurricanes Katrina and Andrew.

Risk Management Solutions (RMS) expects the storm to cause insured losses of between $7 billion and $12 billion. It said that its estimates, based on the latest available damage information, includes both onshore and offshore losses resulting from strong winds and storm surge, but does not include losses from inland flooding or losses covered under flood policies issued by the National Flood Insurance Program.RMS also said that most of this estimated loss is the result of onshore damage from wind and rain across the areas affected by Hurricane Ike. Widespread damage is expected to affect buildings in coastal areas that experienced the highest wind speeds, despite strong modern building codes that are second only to the codes enforced in southern Florida. Losses to high-rise buildings in downtown Houston as a result of roof and window damage may also contribute significantly to the total loss.