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By JARED SHELLY, senior editor/web editor of Risk & Insurance®

By now, most people know the extent of the damage. At least 74 have died so far in the United States; 8.5 million in at least 15 states were without power for a time, and some still are. The New York subways were flooded for days.

Hurricane Sandy devastated the non-hurricane prone Northeast and, for good measure, it left a blizzard in West Virginia.

Now, insurance agents are frantically working to assess the damage.

AIR-Worldwide estimates that losses could be as high as $15 billion, while fellow modeler EQECAT recently increased its estimate to $20 billion. RMS says it's not even possible to make an estimate just yet.

So much for 2012 providing some relief in property/casualty losses after a record-breaking 2011.

"New Jersey and New York will probably have the highest losses from Sandy," said Tim Doggett, principal scientist at AIR Worldwide, citing storm surge flooding and wind damage as major causes.

Annes Haseemkunju, senior meteorologist with EQECAT, said the storm surge in New York was "unprecedented," as it went as high as 15 feet. Combine that with the already high tide, and banks simply flooded over.

Predictions from modeling companies as well as the National Hurricane Center seemed to be right on, as Hurricane Sandy followed its forecasted path from Jamaica to New Jersey then inland.

Meanwhile, winds gusted at record rates, hitting 96 mph in Eatons Neck, N.Y., and 89 mph in Surf City, N.J. While evacuations were ordered in many areas, some people decided to stay -- perhaps thinking that Sandy wouldn't be so bad. After all, the Northeast isn't exactly used to hurricanes. They come once in a while, then recede into distant memory. Plus, last year brought Hurricane Irene, a storm that, in many people's eyes, was just a media-hyped non-event. They did not realize how much damage the storm actually did cause and how close Irene came to causing Sandy-type damage -- or worse.

Interestingly, areas like Philadelphia and Delaware didn't see wind speeds as high as other regions, but did see more downed trees and electrical wires, said Doggett. That's because they got deluged with rain -- the saturated ground allowed for trees and poles with wires to be ripped from the earth.

In addition to the disruption to the New York subways, state highway shutdowns in Pennsylvania, New York, New Jersey and Connecticut, makes it seem nearly certain that business interruptions took place. At this point, the modelers are just uncertain about its extent and what types of businesses are most at risk.

"There is not any industry we would single out as being more impacted than any other," said Doggett. "An entire taxicab parking lot [in New York] was underwater. That whole company won't be functioning for a while."

Certainly, the airlines are taking an early hit, with 20,000 flights cancelled since Sunday, according to FlightAware.com.

Finley T. Harckham,a shareholder in the Insurance Recovery Group at law firm Anderson Kill& Olick, warned that businesses may want to check if they have coverage for losses resulting fromevacuationby order of civil authority, which is triggered when authorities close off access to a damaged area.

He also said businesses need to "think insurance" immediately after a crisis hits because failure to provide timely notice can invalidate coverage.

"Too many businesses do not think about insurance unless their premises are damaged-- or if they do, they fail to calculate the full range of loss," said Harckham. "Small businesses, in particular, may noteven be aware oftheirbusinessinterruptioncoverage, let alone their contingentbusinessinterruptioncoverage."

SANDY'S RANK AMONG THE WORST IN HISTORY?

While Sandy could easily emerge as the third costliest storm in U.S. history, it still doesn't rank up with the worst storms to ever hit the United States -- if past storms were to occur today, according to AIR-Worldwide.

"Sandy [at $7 billion to $15 billion] wouldn?t even crack the Top 10," said Doggett.

The most expensive storm would have been an unnamed 1926 hurricane in Miami ($125 billion), followed by Hurricane Andrew in 1992 ($57 billion) and a Fort Lauderdale storm in 1947 ($53 billion.) Hurricane Katrina ranked fifth at $45 billion in 2005.

As bad as Sandy was, it could have been worse if it occurred earlier in the hurricane season when tides were higher and it could have gotten to the strength of a Cat 2 or Cat 3 with winds in excess of 100 mph-120 mph.

Still, that will bring little solace to the people rebuilding homes and businesses after this crisis.

"For New York and Southern New Jersey," he said, "this is the worst case scenario."

November 1, 2012

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