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Hurricane Harvey is predicted to be the costliest natural disaster in the history of the U.S., with a damage cost exceeding Hurricanes Sandy and Katrina. AccuWeather predicts that the damage cost will hit $160 billion.
AccuWeather, a private weather firm, notes that the storm’s cost represents 0.8 percent of the national GDP, which is now at $19 trillion.
“Business leaders and the Federal Reserve, major banks, insurance companies, etc. should begin to factor in the negative impact this catastrophe will have on business, corporate earnings and employment. The disaster is just beginning in certain areas,” AccuWeather founder Dr. Joel N. Myers said in a statement. “Parts of Houston, the United States’ fourth largest city will be uninhabitable for weeks and possibly months due to water damage, mold, disease-ridden water and all that will follow this 1,000-year flood.”
Before Harvey, the costliest hurricane to hit the U.S. was Hurricane Katrina, which caused $108 billion in damage along the Gulf Coast in 2005. The second-costliest was Hurricane Sandy, which caused $75 billion in damage in 2012. Hurricane Ike, the last storm to make landfall in Texas before Harvey, caused $37.5 billion in damage in 2008.
Harvey’s economic impact on Houston and the region will be devastating. Making matters worse is that many hit by the storm are uninsured. Enki Research’s Chuck Watson told Bloomberg that less than a third of losses caused by the storm are uninsured.
The Associated Press reports that 80 percent of Harvey’s victims do not have flood insurance. Thousands of families will have to take on more debt or spend much more to fix their homes. Others will sell their property to move out. Robert Hunter, director of insurance at the Consumer Federation of America, estimated that flood damage alone cost at least $35 billion.
Hunter explained to the AP that if you don’t have flood insurance, you can apply for federal disaster benefits. However, these are low interest loans that will add more debt.
“Homeowners with water damage can get paid through their homeowners insurance but only if wind blows out a window or sends a roof aloft first, allowing the water in,” the AP notes. “If the water rushes through the floorboard or walls, you’re not covered.”
Before the storm hit, asset management company William Blair & Co. predicted that the storm would result in $25 billion in insurance costs if it was a Category 3 storm. But Harvey hit as a Category 4 hurricane.
“AccuWeather cautions that the negative impact from the storms are far from over. There will be more flooding, damage, fatalities and injuries,” AccuWeather’s Myers said. “We urge all citizens near the path of Hurricane Harvey to remain vigilant and be prepared to take immediate action if flood waters rise.”
Although Harvey is now a tropical storm, it continues to dump rain on the Gulf Coast. Since it made landfall early Saturday morning, it has stalled in the region and made its second landfall near Cameron, Louisiana today. As USA Today notes, the storm will move north along the Mississippi/Arkansas border, eventually reaching Tennessee on Friday. By Saturday, Harvey is expected to reach Kentucky.
The highest rainfall was measured in Cedar Bayou, Texas. A rain gauge recorded 51.88 inches, making Harvey the wettest tropical storm or hurricane to hit the 48 contiguous states.
The New York Times reports that 30 deaths have been linked to Harvey.