AIR Worldwide, catastrophe modeling firm, estimates that insured losses from Sandy to onshore U.S. properties will be between $7 billion and $15 billion.

AIR estimates reflect:

Insured physical damage to property (residential, commercial, industrial, auto), both structures and their contents;

Additional living expenses for residential claims;

For residential lines, estimates reflect AIR’s view that insurers will ultimately pay 10 percent of modeled storm surge damage as wind losses;

For commercial lines, insured physical damage to structures and contents, and business interruption directly caused by storm surge, assuming a 10 percent take-up rate for commercial flood policies (Note: Other flood losses are not modeled or reflected in estimates); business interruption losses include direct and indirect losses for insured risks that experience physical loss;

For the automobile line, estimates reflect AIR’s view that insurers will pay 100 percent of storm surge damage;

Demand surge.


Loss estimates do not reflect:

Losses paid out by the National Flood Insurance Program;

Losses resulting from the compromise of existing defenses (e.g., natural and man-made levees);

Losses from the flooding of tunnels and subways;

Losses to uninsured properties;

Losses to infrastructure;

Low-level losses in states distant to the storm’s center that have resulted from the interaction between Sandy and another frontal system to the west;

Losses from extra-contractual obligations;

Losses from hazardous waste cleanup, vandalism or civil commotion whether directly or indirectly caused by the event;

Other non-modeled losses;

Losses for U.S. offshore assets and non-U.S. property.


Sandy’s diameter made it the largest Atlantic hurricane on record in terms of the span of tropical storm-force winds. The storm affected areas as far north as Toronto and west to the Great Lakes. Chicago reported wind gusts up to 60 mph and waves in Lake Michigan exceeded 24 feet.

“Sandy’s diameter was nearly twice the size of other massive hurricanes including Katrina (2005) whose diameter was 435 miles, Isabel (2003) whose diameter was 575 miles, and Isaac (2012) whose diameter was 450 miles,” said Tim Doggett, principal scientist at AIR Worldwide. “The huge radius helped to keep the winds at Category 1 intensity, and allowed the storm to interact with the an approaching disturbance in the jet stream that resulted in severe weather across a wide swath of the eastern United States, including blizzard conditions in the higher elevations of the Appalachians.”

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