An estimate released earlier this fall evaluated the damages caused by Hurricane Harvey to be upward of $200 billion in southeastern Texas.
The estimate was reached by running a model that combines both direct and indirect losses to public and private infrastructure, equipment, contents and commerce, according to the Center for Business and Economic Research at Ball State University.
The flood damage model, under contract with the Army Corps of Engineers, has been used to determine losses from Hurricane Katrina and floods in Memphis, Tennessee, and in Pakistan. The estimates are “within 10 percent of the final U.S. Army Corps of Engineers study of Hurricane Katrina,” according to Michael Hicks, director at the Center for Business and Economic Research, but he notes that these estimates often have larger errors in smaller events.
The methodology in the study from Ball State is likely flawed due to its methodology, according to Bryan Wood, a meteorologist at Assurant, a risk management and insurance company. Wood said “most analysts who study disaster costs use a number of events to derive estimates” and added he is wary of estimates based on one event because no disaster is ever the same.
The model is run based on one flood event, the Great Flood in 1993, that flooded a large area of homes and businesses for more than 100 days due to heavy rainfall over a period of months. In contrast, the flooding associated with Hurricane Harvey was caused by a rapid onset of heavy rainfall that lasted three to seven days, and the resulting flooding lasted one to two weeks at most in a few locations.
There’s one other big difference between the Ball State report and the actual estimates of damage to property in Texas. A daily report provided by the Texas Department of Public Safety (DPS) said damage caused by Harvey to public roads and bridges was nearly $163 million as of Nov. 3. Private damage to roads and bridges in Texas would raise that toll.
The estimate provided by Ball State for all damage to highways comes in at $3.85 billion, or nearly 24 times higher than what Texas DPS estimates.
The model at Ball State does not provide estimates for wind or tornado damage, which historically makes up a much lower percentage of damage in hurricanes, but Harvey’s winds caused severe damage to structures near the point of landfall. The toll of Harvey’s large number of tornadoes may never be known.
While Hurricane Harvey did make landfall along the central Texas coast as a Category 4 hurricane packing winds of 130 mph, Harvey will be known for the tremendous amount of rainfall it dropped over southeastern Texas and southwestern Louisiana during a multi-day onslaught.
Harvey dumped more than 60 inches of rainfall in two spots – Nederland and Groves, Texas – and more than 20 inches across most of southeastern Texas. This heavy rainfall resulted in flooding across much of Southeast Texas and in parts of southwestern Louisiana.
While actual damage totals may still take months or even years to truly be known, some insurance companies are already giving their estimates of direct losses.
“It is expected that the final direct economic cost will be well into the tens of billions,” said Steve Bowen, a meteorologist at Aon Benfield. “The jury is still out (if) this will hit rarified air at $100 billion.”
This estimate does not include indirect impacts, so the total damages are likely higher.
Several other analytics and loss groups have put out early estimates for losses in Hurricane Harvey.
- RMS, a catastrophe risk modeling company, estimates total losses of $70 to $90 billion. This estimate includes all damage from Harvey, including damage from wind, storm surge and inland flooding in Texas and Louisiana.
- Moody’s Analytics, a risk and analytics company, estimates total losses of about $108 billion.
- Wells Fargo estimates total losses at around $90 billion.
NOAA has not yet weighed in on the cost of damage and other losses caused by Harvey, but it has placed this hurricane, along with hurricanes Maria and Irma, on its billion-dollar disasters list for 2017.