Hurricane Flooding May Cost Texas Billionsby
Texas floods could cause more than $3 billion in losses
Expenses in Mexico may be less than $2 billion, Kinetic says
Damage from Patricia, the strongest hurricane ever measured in the Western Hemisphere, may cost the U.S. billions from floods, even after the storm spared the largest cities in Mexico.
Flooding in Texas may lead to more than $3 billion in losses, though it’s too early to project the extent of damages, according to Chuck Watson, director of research and development at Kinetic Analysis Corp. Losses in Mexico are likely to be less than $2 billion, he said.
Most of the costs in Texas will be for infrastructure such as roads and bridges, and the U.S. government may cover many of the expenses through the National Flood Insurance Program, Watson said. Homeowners and commercial businesses including malls and industrial companies are likely to suffer damages, said Erik Nikodem, president of property in the Americas at American International Group Inc.
“Mexico just had an incredible piece of luck,” Watson said. “It was remarkable” that the hurricane’s eye bisected the coastline between the resort town of Puerto Vallarta and the major port of Manzanillo, sparing both. “If the storm was 20 to 30 miles (32 to 48 kilometers) one way or another it would be catastrophic for either of those two cities.”
In Mexico, about $500 million of the losses may be insured, Watson said. The total economic cost could have easily been more than $10 billion had the major cities been struck, he said. Fishing villages and homes were damaged, Nikodem said, and there still may be more destruction from mudslides, which the U.S. National Weather Service warned could be life-threatening. Agriculture could suffer damages in both Mexico and Texas.
Damage in Mexico was less than expected, President Enrique Pena Nieto’s office said Saturday. Electricity has been restored to 88 percent of about 262,000 customers who lost power due to the storm, the state-owned electricity provider said Sunday. The lights are on in Puerto Vallarta and Manzanillo.
Patricia caused damage in 41 municipalities in the states of Jalisco, Colima, Nayarit and Michoacan. There were no reported fatalities, and little storm damage was visible in Guadalajara, Mexico’s second-largest metropolitan area.
Mexican newspaper ran photos showing flooding, downed trees and damages to some buildings in coastal areas. About 100 people were evacuated in the inland state of Aguascalientes after a dam overflowed following rain from the storm and flooded homes. Mexico’s military is providing temporary shelters and food in affected areas.
In the U.S., heavy rains pounded Houston, where roadways and vehicles were under water and flash flooding derailed a freight train on Saturday near Corsicana, about 50 miles south of Dallas, according to Risk Management Solutions. More than 10 million people in Texas and Louisiana are under flash-flood watches, the firm said in an update on its website.