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How is it done? Calculating the cost of disasters

02:30 PM
October 22, 2022

How is it done?
Calculating the cost of disasters

Flooded townJean Lafitte, Louisiana was hit by Hurricane Ida last year causing millions of dollars in damage, but how are the costs actually calculated? - © picture alliance

When disaster strikes it is common to see damages reported in the millions of dollars, but have you ever wondered how this is calculated?

In the immediate aftermath of a severe storm, hurricane, or other natural disaster regions can be left devastated making it difficult to immediately determine the full extent of the damage.

Initial estimates are often provided by insurance companies that can track incoming claims from property policies. This can change significantly and is not always shown to be accurate once a full investigation is carried out.

Since not all properties will be covered by insurance this estimate is extrapolated to include non-covered properties too but does not take into account infrastructure damage.

For major incidents such as the severe flooding and wind damage seen in Florida from Hurricane Ian recently satellites, and aircraft are used to track damage from above.

From these images government agencies can gauge the costs that will be incurred replacing damaged roads, pavements, signages, and other forms of infrastructure.

Some reports will also include the hits to local businesses. For example, evacuations deplete local labor sources, shut retail stores, force leisure facilities to close and impact the local economy.

It can take months for official reports on natural disasters to ultimately uncover the true extent of costs.

Once these figures are released they generally do not reflect the first figures released in the immediate aftermath of a disaster.

Weather & Radar USA editorial team
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