RMS Puts Dolly Loss At Less Than $750 Million

Risk Management Solutions, the latest catastrophe modeler to evaluate insured losses from Hurricane Dolly, said they would amount to less than $750 million—less than some previous loss forecasts.

The loss estimate for the Category 2 storm that hit Texas yesterday includes wind, flood and storm surge damage to residential, commercial and industrial properties.

Newark, Calif.-based RMS said the figure also includes crop damage and business interruption resulting from power outages. RMS said some 500,000 people would be impacted by the storm.

Yesterday, catastrophe modelers Boston-based AIR Worldwide and Eqecat, headquartered in Oakland, Calif., released their own loss estimates.

AIR said losses could be anywhere from $300 million to $1.2 billion with an expected (mean) loss of $600 million.

Eqecat gave a preliminary estimate of insured loss of less than $800 million.

Christine Ziehmann, director of model management at RMS, said in a statement: “The largest uncertainty in the loss estimate comes from potential flood damage. The amount of rainfall is currently well below the level of extreme historical events in the area, like Hurricane Amelia in 1987, which resulted in 48 inches of rain, and Beulah in 1969. If the flood damage is limited, then we expect the total insured loss to come in much lower than $750 million.”

Tropical storm warnings remain in effect in some portions of Texas as Dolly was downgraded to a tropical storm with sustained winds of 45 mph by early this morning, according to the National Weather Service’s National Hurricane Center.

The Weather Service said the storm is expected to dump 8-to-12 inches of rain, and up to 20 inches in isolated areas, over portions of southern Texas and northeast Mexico.

Hurricane Dolly came ashore yesterday afternoon near South Padre Island with maximum sustained winds reaching near 100 mph, the Weather Service said.

Dolly is moving inland on a north-northwest path and is expected to produce isolated tornadoes over south central Texas today.

There were numerous reports of damage from the storm. Texas Gov. Rick Perry declared 15 counties disaster areas and has requested federal disaster aid. As of yesterday, the state said more than 2,800 people were in shelters.

In Mexico, there is the danger of flooding from the heavy rains and 500,000 people were without drinking water when a water treatment plant was damaged.

No deaths have been reported from the storm.