For RMS, Michael Kistler, director of model solutions, says, “Our estimate range reflects some uncertainty, including the definition of hurricane vs. non-hurricane deductibles for individual states, and the uncertainty surrounding losses from damage caused by tropical-storm winds. During Irene, a large swath of tropical-force and low-hurricane-force winds swept across a large area of exposure causing widespread, low levels of damage.”

Meanwhile, Eqecat released more information on how it arrived at its estimate, and the firm offered estimated  losses for the National Flood Insurance Program (NFIP). The modeler notes that low-hurricane-force winds and heavy rainfall “contribute significant uncertainty to the ultimate levels of insurance payouts; a five-knot increase in modeled wind speeds would double the estimated losses from this event and a five-knot decrease would cut this estimate in half. A 10 percent increase in damage rates to properties from heavy rains would cause a 15 percent increase in the loss estimate.”

While Irene caused “significant billions of dollars of damage from winds and rain,” says Eqecat, the primary driver of damage was from rainfall-induced flooding.

The heavy rains cause some uncertainties in hurricane-damage estimation, Eqecat notes, “including the additional damaging effects of an exceptionally wet event and uncertainties around how flood and wind and rain damages are separated for insurance-loss payments.”

Eqecat says most of the damage from Irene was caused by extensive flooding, and most of this is expected to be uninsured. The largest flood insurer is the NFIP, and Eqecat says U.S. historical trends in NFIP data indicate that losses should not approach the levels reached from recent Gulf of Mexico hurricanes, and likely will be less than $1 billion.

By contrast, Hurricane Katrina resulted in $16 billion in flood-program losses; Hurricane Ike resulted in $2.6 billion; and Hurricane Ivan resulted in $1.6 billion.

More than 3.4 million NFIP policies are in the Gulf coastal states, while the East Coast and Northeast have a lower concentration of policies.

Eqecat says that, as of 2010, there were 136,000 flood policies in North Carolina, 230,000 in New Jersey, 160,000 in New York, 40,000 in Connecticut, 15,000 in Rhode Island, 25,000 in Delaware and 70,000 in Maryland.

Eqecat excludes potential insured losses to the NFIP from its insured-loss estimate for Irene.