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Specialists predict insurance effects resulting from Hurricane Sandy

By John Daley | Posted - Oct. 30, 2012 at 8:20 p.m.


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SALT LAKE CITY — Hurricane Sandy has impacted people in a way that is hard to capture. In the second day of the storm, around 80 million people have been affected in one way or another. The storm will also have an economic impact, but in ways that may be surprising.

As Superstorm Sandy moves on, the focus turns to the cleanup.

"It's really a catastrophe," said Vinny Giovaniello, a resident of Long Beach.

The repair is definitely no small matter when you consider that the New York metro area that was nailed by the storm, accounts for 10 percent of the nation's economic output.

"Clearly, the challenges our city faces in the coming days are enormous," said New York City Mayor, Michael Bloomberg. "Not only interrupting the trading markets, the transportation markets, especially the airlines, not only the commerce, not only the damage," said Bloomberg. "Tremendous amount of impact."

Mississippi Insurance Commissioner Mike Chaney said that after Katrina, the costs of the destruction were huge, but offset by the economic activity that came with rebuilding.

"Katrina caused close to $50 billion in damage, but the upshot is that after Katrina, the recovery was an economic boon to the area," Chaney said.

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Sandy is expected to bring a slight rise to gas prices and slightly slower economic growth in the short run, as well as a possible uptick in insurance premiums, as another region rebuilds from yet another devastating natural disaster.

"I can't tell you today whether or not global warming is the cause, but there is definitely a significant uptick in the number of natural occurring disasters in the United States, that will impact the individual homeowner, car owner in their insurance premiums," said Economist Aric Krause from Westminster College.

The impact, in dollars, of all these severe weather events is clearly growing.

The German reinsurance giant Munich Re, one of the world's biggest reinsurance companies, has put out a 300-page report called "Severe Weather in North America." According to the report, between 1980 and 2011, the overall losses from weather catastrophes was over $1 trillion in 2011 dollars and 30,000 lives lost.

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John Daley

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