Hurricane Wilma is expected to create between $2 billion and $10 billion in insured losses, according to catastrophe modelers.
The storm arrived in Florida as one of the latest in a record season that has seen 22 named storms, a record according to the National Weather Service (NWS).
Hurricane Wilma hit Florida this morning after battering Mexico's Yucatan peninsula and resorts for a full day leaving that country with a $1 billion to $3 billion insured loss, according to Oakland, Calif.-based Eqecat.
Risk Management Solutions, of Newark, Calif., came out with the highest Wilma loss estimate, with a range of $6 billion to $10 billion.
AIR Worldwide Corporation, based in Boston, and a subsidiary of Insurance Services Office, Inc., in Jersey City, N.J., estimates that insured losses from Hurricane Wilma, the 21st named storm, would come in at between $6 billion and $9 billion.
Eqecat, Inc. issued an initial estimate early this morning putting Florida's insured loss range from $2 billion to $6 billion. Later they raised the figure to $4 billion to $8 billion.
Wilma barreled into the southern Gulf Coast of Florida around 6:30 a.m., as a Category 3 storm on the Saffir-Simpson scale, with estimate sustained wind speeds of 125 mph.
Eqecat and RMS said their loss estimates included commercial losses, business interruption and "demand surge," which occurs when the demand for products and services to repair damages significantly exceeds the regional supply.
Florida's Gov. Jeb Bush said today that he was seeking disaster declarations for 14 counties in the state. He said between 2.2 and 2.5 million homes are without power. The storm, he said, touched off several tornados and there was one reported death.
In Mexico television reports showed the resort city of Cancun sustained significant flooding and devastation. RMS said the region has not been hit by a major hurricane since Hurricane Gilbert struck in 1988.
Since 1988 the Cancun area has grown significantly, and the tourism development would "result in considerable property damage" from Wilma, RMS said.
Prof. Robert Klein, director for the center of risk management and insurance research at Georgia State University in Atlanta, said this hurricane season underscores the need for insurers and regulators to get together and deal with the current hurricane cycle.
"There is the need for a meeting of the minds" between insurers and regulators to establish a financial model that works for insurers, but quells political concerns over increased premiums.
"Those people [along the Gulf Coast] one way or the other will pay more for insurance," he remarked.
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