Hurricane Harvey made landfall in Texas Friday as the strongest hurricane to hit the United States in a decade, leaving several people dead and tens of thousands more displaced. Additional rain this week could bring the total rain associated with Harvey to 50” in certain areas. Early indications are that Harvey was more a flood loss than a wind loss, and more of a primary rather than reinsurance event. Specifically, estimates from reinsurance brokers put combined wind and flood industry losses in the range of $8 billion to $10 billion, excluding the National Flood Insurance Program, with flood accounting for the majority of claims. Early estimates from industry experts suggest that Harvey may have inflicted between $30 and $40 billion in total economic damages. Insurers will also face a deluge of business interruption claims from insureds with various commercial exposures. As we reported last week, Harvey will almost certainly generate complex coverage disputes that will take years to ultimately resolve.
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