- The Washington Times - Sunday, August 28, 2005

From combined dispatches

Hurricane Katrina may cost insurers more than $30 billion, which would make it the most expensive storm ever to hit the U.S., a storm modeler said.

Eqecat Inc., which uses computers to gauge losses, estimated $15 billion to more than $30 billion in claims, with the higher estimate reflecting a direct hit on New Orleans. With sustained winds of almost 160 mph last night, Katrina was a Category 5 hurricane, the strongest level on the Saffir-Simpson scale.

The storm was projected to make landfall this morning with “potentially catastrophic” results, said the National Weather Service’s National Hurricane Center in Miami.

“The New Orleans area has pretty high insured values,” said Tom Larsen, a senior vice president at the Oakland, Calif., company. “Certainly there would be areas of pretty substantial flooding.”

Eqecat’s highest estimate means Katrina could be more costly for the insurance industry than Hurricane Andrew, which generated $20.8 billion in claims in southeast Florida in 1992. Katrina already may have triggered $1 billion to $2 billion in damage after slicing through southern Florida on Friday, Eqecat said.

Max Mayfield, director of the National Hurricane Center, described Katrina as a “perfect” hurricane.

Katrina had a central pressure — a measure of a storm’s intensity — of 902 millibars, which would make it one of the four strongest storms on record. The Labor Day hurricane of 1935 that hit the Florida Keys, killing about 600 people, was the strongest with a minimum central pressure of 892 millibars on landfall.

New Orleans, which issued a mandatory evacuation yesterday, has more than $40 billion of insured property, according to Risk Management Solutions, another storm modeler. The seven parishes surrounding the city have more than $110 billion of insured property.

Katrina’s track would take it through key U.S. oil and gas areas in the Gulf of Mexico, and the hurricane seemed likely to increase already high gasoline prices.

Oil rigs were evacuated and casinos along Mississippi’s coast were closed.

The storm also endangers the port serving New Orleans, one of the most important in the world, and could cause billions of dollars in damage to the city’s tourism infrastructure.

Eqecat’s lowest estimate reflects Katrina coming ashore farther east near Mobile, Ala., Mr. Larsen said.

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