Power Outages, Flooding Persist as Sandy Tracks North
The clock is ticking, and insured losses are rising, as crews take to the most heavily hit regions to assess infrastructure damage and reconnect power to millions.
Insurance Networking News, October 31, 2012
RMS forecasts a northbound track for the extra-tropical storm Sandy after, late yesterday, AIR Worldwide upped the estimated insured losses from this week’s storm to $7 billion to $15 billion.
Forecasts are for strong winds to continue through Wednesday over portions of the northeast, central and southern Appalachians and across the Great Lakes, with warnings that the strong winds may cause flooding along portions of the Great Lakes. Additional rainfall across the Mid-Atlantic and southern New England is forecast over the next 24 to 48 hours.
Power outages are extensive, impacting nearly 8.5 million people across 15 states according to the latest reports, and it’s unclear how long it will take to restore power. What is clear is that reconnection rates have been shown during previous hurricanes to be an important driver of losses. Infrastructure damage, for example subway stations or power lines, over a wide area can take time to repair, depending on how quickly sizable repair teams can be mobilized. Prolonged power outages can also interfere with property repairs.
Off-premises power losses may also contribute to insured losses. Contingent business interruption, according to RMS, can also be aggravated if mandatory evacuations and no-go zones are maintained for an extended duration, for example in flooded towns and regions.
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