EQECAT: Preliminary Insured Loss Estimates from Hurricane Rita Could be $9-$18 Billion

EQECAT Inc., an authority on extreme risk modeling, said Friday afternoon, based upon information provided by the National Oceanic and Atmospheric Administration (NOAA) about Hurricane Rita, preliminary estimated insured losses from wind damage could range between $9 billion and $18 billion, depending upon various factors at landfall on the Gulf Coast.

The preliminary EQECAT estimate is based upon landfall along a section of the Gulf Coast stretching from Port Arthur, Texas to Orange, Texas. The storm-intensity used in developing this estimate was a strong category 3 / weak category 4 storm, consistent with current National Weather Service forecasts.

However, hurricanes often make dramatic and unexpected changes in direction and intensity — both strengthening and weakening — as they move toward land. The actual intensity, and forward speed at landfall, coupled with the population and structural density at the landfall site, among other factors, can result in significant changes in assessments of preliminary estimated damage.

A storm surge of up to 15 feet is expected in some areas and flood damage is expected in areas near the landfall. The National Weather Service is forecasting from 10 to 30 inches of rain inland, which will exacerbate the flooding in areas.

Separately, EQECAT estimated insured losses from Hurricane Rita in the Florida Keys earlier this week range between about $300 million and $800 million.