The 2017 hurricane season is almost certain to become the costliest since 2005, the year of Katrina, and might rival or surpass it.
AIR Worldwide estimates that total property losses from Harvey could reach $75 billion – that’s insured and uninsured — and doesn’t include the losses to the debt-swamped National Flood Insurance Program. And Irma, poised to batter Florida, is likely to add prodigious amounts to both accounts.
When it made landfall last month in Texas, Harvey was the first “major” hurricane to hit the U.S. mainland in 12 years, a record run of luck that has ended with a vengeance.
If AIR’s Harvey estimate is accurate, it is certain to rank for damage among the most expensive tropical storms on record in raw dollars and in “normalized” dollars – which calculate what a storm would cost if it hit at today’s levels of building and inflation.
In terms of raw dollars, Katrina is No. 1 on the list compiled by ICAT, the catastrophe-insurance service based in Colorado, at $81 billion.
For normalized amounts, only six storms on record exceed $75 billion. No figures yet are available for federal disaster aid, which will flow for years, but Harvey could easily exceed the $100 billion.
For overall economic impact, having assaulted one of the nation’s most-important business hubs and its fourth-largest city, Houston, Harvey will be the costliest ever, according to Joel Myers, head of AccuWeather Inc.
It’s also too early to tell what Harvey will have meant to the National Flood Insurance Program, a disaster unto itself.
The most recent analysis by the General Accounting Office has the program $23 billion in debt to the U.S. Treasury, which is in effect the program’s reserve fund. That amounts to about $200 per household.
What are the chances Treasury will be repaid? The GAO says it’s “unlikely.”
Last year, the program paid out more in losses, $3.7 billion, than it collected in premiums, $3.3 billion.
Compared with this year, 2016 might seem like the good old days.