Hurricane Sandy appears to have easily caused twice or even three times the losses of last year's Hurricane Irene, but final totals will be hard to come by for some time because of the scale of the disaster, catastrophe forecasting companies said on Tuesday.
One of the biggest questions now is who will pay for the extensive damage to municipal infrastructure - subway tunnels, train tracks, electrical transformers, coastal boardwalks and piers - that Sandy left behind along the East Coast.
The short answer, experts say, is that there may be some insurance in place for certain losses, but beyond that taxpayers could well end up on the hook for most of it.
AIR Worldwide, one of the three primary firms used by the insurance industry to calculate disaster exposures, indicated that Sandy is likely to have caused insured losses of anywhere from $7-billion to $15-billion. That figure excludes residential flood losses as well as subway and tunnel flooding.
Its assessment follows that of peer Eqecat, which said late Monday that Sandy was apt to cause anywhere from $5-billion to $10-billion in insured losses and from $10-billion to $20-billion in economic losses.
If AIR is correct, Sandy would rank as the third-worst hurricane in history, based on inflation-adjusted losses, according to the Insurance Information Institute.
A clearer picture should emerge in the days ahead as insurers get their catastrophe teams into the most affected areas and begin making assessments. Allstate said it had more than 1,100 claims staff ready to go once the storm has passed.
Eqecat and its peers are likely to refine their estimates as well. RMS, the other large disaster modeler, said Sandy should outdo the roughly $4.5-billion in insured losses Irene caused after hitting the northeast in August 2011, though it has not assigned a precise figure as yet.
"Sandy event is much more severe ... and has impacted NYC to a much worse degree than Irene," RMS said in a storm report early Tuesday.
State Farm, the largest home and auto insurer in the United States, said late Tuesday it has already received more than 6,000 homeowners' insurance claims and nearly 900 auto insurance claims for Sandy.
By comparison, in the 24 hours after Hurricane Isaac hit Louisiana in August, the company reported just 1,100 claims from that storm.
For homeowners who suffered damage in the storm, on the surface the claims process might seem straightforward. Wind damage goes to their homeowners' insurer. Flood damage goes to the U.S. Federal Emergency Management Agency's National Flood Insurance Program.
Lawyers say it's not that simple. Particularly in cases where a house is partly or entirely destroyed, it can be difficult to tell what happened, and more importantly in what sequence. Litigation on those issues after Hurricane Katrina took years.
"I think people will be challenged to come up with how the events unfolded and what percentage of loss was from one versus the other," said Mike Nelson, chairman of the insurance-focused law firm of Nelson Levine de Luca & Hamilton.
In one extreme case Nelson handled, where a house was totally obliterated, lawyers were reduced to arguing that flood waters were responsible because there was flood debris on top of a tree that was taller than the house had been.
Such disputes pale next to the problem of insuring the enormous New York City infrastructure.
Consolidated Edison said Tuesday its 337,000 Manhattan and Brooklyn customers without power could be in the dark for four days, an eternity by the city's standards. Subway service is likely to be out until the weekend, the city said.
In Con Ed's case, the utility carries insurance policies that may cover it for the inevitable lawsuits over business interruption, structural damage from exploding transformers, and similar blackout-related losses.
In the case of an institution like the MTA or the Port Authority, there is insurance in place, but it is unclear how far it will actually go.
The MTA maintains a so-called captive insurer, or insurance company that it set up itself for its own needs, called First Mutual Transportation Assurance Co.
A 2010 examination of First Mutual conducted by New York regulators indicated that it had about $1-billion in reinsurance lined up for property claims. But once that money runs out, someone else has to step in.
"It's the same basic principles of insurance that would apply. For something like the MTA that has its captive ... at some point in time that's exhausted and something stands behind it or it's insolvent," said Dan Gerber, co-chairman of the global insurance group at the law firm Goldberg Segalla.
An MTA spokeswoman acknowledged on Tuesday that the authority is self-insured for its losses but declined to comment on how much of its losses insurance might pick up.
Regardless of what the costs are to the MTA, Con Ed, or other authorities, there is a general consensus that the claims will not have a severe impact on the insurance industry.
Most financial analysts expect that an insured loss of even $10-billion would have little effect on insurers and reinsurers, aside from a probable hit to fourth-quarter earnings.