Property Damage: One billion dollars!
class=img_thumbleft>One of the more ridiculous aspects of natural disaster media coverage is the property damage estimates that inevitably emerge within hours of the pertinent event. In the present circumstances the absurdity of such projections has been magnified as the situation has rapidly devolved from a fairly routine hurricane to an emerging national disaster.
A quick search of the Nexis database shows that the figures have fluctuated wildly in the last 72 hours, providing absolutely no useful information to the public. CNNMoney reported on Monday that "risk modeling firm" Eqecat initially estimated that insurance companies would be hit with between $15 billion and $30 billion in damages. But the company then twice downgraded that figure within hours of Katrina hitting land, eventually settling on $9 billion to $16 billion.
By Tuesday morning the media seemed to have collectively agreed-- through some unknown process probably not unlike picking numbers on a roulette wheel--on the figures of $10 billion to $25 billion. Of course this is such an engulfing range that it renders the information completely useless.
Over the last 24 hours, as the situation has dramatically worsened, media outlets have hastened to ratchet up their damage projections. By 6 p.m. yesterday CNN was announcing that damages were expected to top $25 billion, while other outlets reported that the insurance costs could now reach $34 billion. This morning the Philadelphia Inquirer declared Katrina the "most expensive hurricane in the nation's history," with the property damage tally upped to $40 billion.
Perhaps they're taking bets on the final figure in Vegas. For the record, risk modeling expert Paul Demko projects that Katrina will ultimately cost insurance companies $118,434,327,612.43.
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