Catastrophe risk modelling agency RMS has predicted that economic losses caused by wind, storm surge and inland flooding from Hurricane Harvey could reach $70 to £90 billion.
The majority of losses are likely to be from inland flooding in the Houston metropolitan area, where there are more than seven million properties representing over $1.5 trillion in value.
RMS suggested that the majority of the losses would be uninsured, given that private flood insurance is limited.
The National Flood Insurance Program (NFIP) has provided coverage for some of the residential losses. It has been suggested there 500,000 NFIP policies affected by Hurricane Harvey.
According to RMS, there still remains uncertainty around final losses, as flooding continues. The preliminary analysis by RMS is to be updated and is not the official insurance loss estimate.
Michael Young, head of Americas climate risk modelling at RMS, said: “Hurricane Harvey has already broken all US records for tropical cyclone-driven extreme rainfall, with observed cumulative amounts of 51 inches. And with the rain still falling heavily and the waters rising, the situation is too fast-moving to be stating with certainty what the losses in Texas could be.”
Young added: “We have used the power of the new RMS US high definition flood model to give valuable, preliminary insights to our clients. It will be followed by an official insurance loss estimate in the coming weeks.”
