The costs of the mile-wide tornado that ravaged central Oklahoma Monday afternoon could total up to $3 billion, an expert on the financial fallout from tornadoes told The Huffington Post Tuesday, making the event one of the costliest tornadoes in U.S. history.
Kevin Simmons, a professor at Austin College in Texas, has been studying the economic and social effects of tornadoes for nearly a decade, publishing a book on the topic in 2011. Simmons said the current catastrophe is much worse than the tornado that ripped through Oklahoma in 1999, costing over $1 billion at the time, but is likely not as financially devastating as the storm that hit Joplin, Mo., in 2011.
“Let’s say $1.5 billion as a lower-end estimate this time,” Simmons said. “We’re talking somewhere between that and Joplin, which was about $3 billion.”
“Joplin was 158 fatalities,” Simmons said. “If you use that as a rough gauge, you can see that this was certainly approaching the Joplin range. It’s certainly possible that it could be more, but Joplin serves as a benchmark for the worst one ever.”
Costs associated with a tornado can quickly escalate to include incidentals other than payments by property and casualty insurers, Simmons and another expert on the cost of catastrophes said.
Julie Rochman, CEO of the Insurance Institute for Business and Home Safety, said the power of this particular tornado meant losses would be large.
“This was an EF-4, which means it’s going to tear out bridges and roads and things that are not insured,” Rochman said. “There’ll be a tremendous amount of losses that will be borne by the state and county as well.”
“Power is out for a significant part of that area. That’s going to be a big piece as well, as there will be people who lose business. All of those things count: the structural losses, the losses of contents inside homes and businesses, the business interruption. Some people were at work when it happened, so there’s also going to be worker’s compensation losses. Vehicles are going to be a huge number of the losses.”
Simmons, the professor of economics, did caveat his comments to note that he expected those affected to bounce back quickly.
“Oklahoma folks are a resilient people,” Simmons said. “They are going to rebuild, and they are going to rebuild quickly.”