1 mil­lion struc­tures hit hard by Matthew

Storm’s dam­age in the United States es­ti­mated at $10B

Baltimore Sun - - AROUND THE REGION - By Christo­pher S. Ru­gaber and Russ Bynum

For a storm that in­flicted less dam­age than many had feared, Hur­ri­cane Matthew nev­er­the­less im­paired or de­stroyed more than 1 mil­lion struc­tures, forced busi­nesses from Florida to North Carolina to close and put thou­sands tem­po­rar­ily out of work.

In many af­fected ar­eas, small- busi­ness own­ers were still assess­ing the dam­age.

“I’ve never had any­thing like this in 12 years of busi­ness,” said Ami Zip­perer, who has two gar­den sup­ply stores in the Sa­van­nah, Ga., area.

Zip­perer said she doesn’t know how much she’s lost or what in­sur­ance will cover. Small busi­nesses from Florida to North Carolina con­tinue to as­sess the dam­age from Hur­ri­cane Matthew.

She said about 10 per­cent of her in­ven­tory of plants was dam­aged, but the big­ger chal­lenge will come from los­ing $5,000 to $7,000 a day in rev­enue.

One store is still closed and many home­own­ers in the area, Zip­perer said, aren’t fo­cused right now on land­scap­ing.

All told, the storm prob­a­bly caused $10 bil­lion in dam­age, ac­cord­ing to an es­ti­mate from Gold­man Sachs. In­sur­ance com­pa­nies will likely be li­able for about $4 bil­lion to $6 bil­lion of that to­tal, ac­cord­ing to an es­ti­mate Satur­day by CoreLogic, a real es­tate data provider.

But the fig­ures sug­gest Matthew’s ef­fect on the broader na­tional econ­omy will be min­i­mal.

Though dam­age es­ti­mates are usu­ally re­vised higher after more com­pre­hen­sive as­sess­ments, the cur­rent fig­ures would still make Matthew the 22nd­worst storm since World War II, Gold­man es­ti­mates.

By com­par­i­son, Su­per­storm Sandy, the sec­ond­worst storm, caused $15 bil­lion to $20 bil­lion in in­sured losses and $50 bil­lion to $60 bil­lion in over­all dam­age in 2012.

Matthew was re­spon­si­ble for at least 34 deaths in the United States. The storm also killed more than 500 peo­ple in im­pov­er­ished Haiti.

Typ­i­cally, nat­u­ral dis­as­ters tem­po­rar­ily de­press lo­cal and re­gional eco­nomic ac­tiv­ity as stores and restau­rants close and peo­ple scale back spend­ing after los­ing homes, cars or other prop­erty.

But over the long run, re­build­ing in the after­math of dis­as­ters can off­set much of the dam­age, leav­ing lit­tle over­all eco­nomic im­pact.

Home­own­ers can ex­pect to shoul­der a higher bur­den of costs from Matthew, be­cause home­own­ers’ in­sur­ance poli­cies trig­ger their own set of de­ductibles — the por­tion that must be cov­ered by the pol­i­cy­holder — when there is wind dam­age caused by a hur­ri­cane.

These days, home­own­ers who live close to the coast tend to opt for a 5 per­cent de­ductible on the hur­ri­cane wind dam­age por­tion of their pol­icy, said Bob Hunter, direc­tor of in­sur­ance for the Con­sumer Fed­er­a­tion of Amer­ica.

In that ex­am­ple, a home­owner with a $200,000 pol­icy on their home would be on the hook for $10,000 of the re­pair costs.

“A sig­nif­i­cant part of the risk is now back on home­own­ers,” Hunter said. “And some of that ends up be­ing dis­as­ter re­lief, so tax­pay­ers also get in­volved more.”

The storm also forced the Port of Sa­van­nah, the na­tion’s fourth-busiest con­tainer port, to shut down for sev­eral days dur­ing the peak sea­son, when re­tail­ers are im­port­ing their hol­i­day in­ven­to­ries.

Griff Lynch, ex­ec­u­tive direc­tor of the Ge­or­gia Ports Au­thor­ity, said he thinks any back­log caused by the storm should be elim­i­nated by Satur­day.

“There was a de­lay for all the re­tail­ers; they lost a day or two,” Lynch said. “But I think by the end of the week, as­sum­ing we get the ves­sels in here Wednes­day, prob­a­bly by Satur­day we’ll be back on track.”

Su­per­storm Sandy tem­po­rar­ily cost about 30,000 jobs, ac­cord­ing to Gold­man, mostly in restau­rants, ho­tels, and ed­u­ca­tion in New York and New Jersey.

Yet the re­build­ing ef­forts con­trib­uted within weeks to a sub­stan­tial eco­nomic re­bound of about 40,000 po­si­tions, in­clud­ing a big in­crease in con­struc­tion.

Given Matthew’s smaller im­pact, Gold­man Sachs es­ti­mates that it might cost about 5,000 jobs in Oc­to­ber. The en­tire U.S. econ­omy has about 144 mil­lion jobs.


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