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It losses there potential -- About thirty comments before the opening bell what about losses for the insurance industry.
From hurricane -- rain third deadliest fourth deadliest storm since 1980 but Adam.
If you wanna talk about the money -- -- as many people thought for the insurance industry.
Right and we we always point out on Fox Business that when we're talking about the loss for -- -- the financial -- the human toll of this tragedy is just growing and growing every game you see in the video.
But we've had a discussion that's been ongoing with Charles Watson who is the director of -- search.
At kinetic analysis that you -- genetic analysis quoted in different news organizations about the cost of the storm.
Very firm based out of Maryland and what they do for a living is they to have models and they analyze what a storm is going to cost and not -- this kind of disaster.
They have different models for all kinds of disasters -- the nuclear power plant god forbid.
Were to have a problem they have different models which extrapolate what the cost would be going forward.
On this storm they originally thought it could be a twenty billion dollar of that -- last Friday.
They drop their estimate down to fourteen billion dollar event and then Sunday night very late they issued the latest reports that this will be about seven billion total loss.
Maybe eight billion because of the flooding in New England.
But no more than that now this does not include.
The loss of potential business the right weekend business from the tourists and and the stores on the beach but it does include the actual out of pocket -- both insured and uninsured and the -- is going to be two point six to three billion.
And -- see that analysts and uneven downgrading of profit outlooks for many of these insurance companies part of the reason is they say the premiums -- -- out this year five to 10% on.
Home and auto insurance so they've already kind of offset any.
Further costs -- there's that issue but there's also Connecticut points out in there that's it just a four page analysis they put out on Sunday but they point out that what people are overlooking here is that in the past on a storm like this a disaster like this.
50% of the loss was insured that will not be the case with this storm people would drop their insurance because of the economy.
Deductibles have gone up tremendously people used to -- maybe 500000 dollars at a flat deductible but -- pay a percentage anywhere from two to 5% we'll figure out 5% to 500000 dollars if house on the short.
It gets to be very pricey so some people may have to term because the economy is -- -- say this in the kinetic report.
If if people don't have the funds reserved and a lot don't yeah and they can't get loans from the banks because banks are not lending despite what they tell us.
How are they gonna rebuilt so in years past when people -- and Peter -- talked about we tend to rebuild bigger.
Connecticut saying that may not be the case this time people may not rebuild it may not have the funds to do it.
And a in the situation a flooding Adam many people don't get a flood insurance even though it's exceptionally cheap.
But I do you have to wonder how many people don't have flood insurance we were in these hard hit areas because they just never expected this to -- That that is a very good way to put it the other issue is banks may not be willing to lend to people -- that that He might one report was talking about how the flood.
Within -- areas that they have -- That this here flood -- just like never accurate rabbits are -- off and so the banks are not necessary -- willing to -- to rebuild in what might be a -- Dempster and can expect premiums go up even more following this this this and it's as anything that would indicate well because of this -- from haven't seen anything that indicates the way we they were talking about premiums going up after hurricane -- in and I yeah -- in Florida and then you had you have in some states you have insurer of last -- the state had -- Korea principles because of storms.
Haven't seen anything about this because again.
The -- the cost of the insurance companies the insured losses expected to be.
Connecticut saying two point 63 billion is one estimate three to 59 but it's still far less just on the property -- from what people had anticipated.
One of the things to use often see is.
If they if these insurance companies think that they're going to be more -- to be seeing this in the last fifteen years so that they have to stop selling insurance correct because there's states clamp down on they don't want -- to charge the going rate to copper say when damaged.
In a coastal area so you have all these insurers of last resort that in the state run pool -- -- and if they run sort of money it winds up on the shoulders of people who don't live in these.
These storm prone areas.
And you've probably pointed out at some point this morning -- was formed well not Jose but tropical storm DS is out there on the same kind of trajectory.
As we talk about ice storms and dropping insurance.
It's -- -- incredibly -- some Adam thank you so much of a great day Adam Shapiro all of that.
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