The damage from tornadoes that ripped across the South earlier this week killing more than 300 people is estimated at between $2 billion and $5 billion, according to EQECAT, an insurance modeling firm.
“It’s still very early and the breadth of this range is indicative of that,” Tom Larsen, a senior vice president at Oakland, Calif.,-based EQECAT, told FOXBusiness.com.
“There have been tornado outbreaks that have been more costly,” Larsen added. “But this is very extreme. We haven’t seen this in a number of years.”
In Alabama, which was the hardest hit of the seven Southern states impacted by the storms, a spokesman for the state insurance office said Thursday that a cost estimate might not be available until early next week.
Ragan Ingram, spokesman for the Alabama Department of Insurance, said in an e-mail that the next couple of days will be consumed by “search and rescue/recovery” efforts.
“I suspect it will be early next week before we can start to formulate a decent estimate,” he wrote. Ingram did not immediately return a message seeking an update on Friday.
President Obama visited badly damaged areas of Tuscaloosa in western Alabama on Friday.
“It’s devastation in Tuscaloosa,” said Stacey Gann, director of programs for the Tuscaloosa Chamber of Commerce. “It’s like nothing you’ve ever seen before. There’s a lot of need here and that need is growing daily.”
Gann said the local Chamber has set up a hotline for area businesses in need of assistance.
Widespread power outages have shut down many businesses whose structures were not damaged by the storms.
“We want to try and provide them with an office, get their phone, Internet and computers connected. We can do a needs assessment that will help determine how to get that business up and running again,” said Gann.
Birmingham, Alabama’s largest city, was also heavily damaged Wednesday night when storms of tornadoes totaling 160 or more touched down destroying homes and businesses, ripping up power lines and killing at least 310 people.
Authorities say it is the worst natural disaster in the U.S. since Hurricane Katrina struck New Orleans in 2005.
Larsen said tornadoes don’t generally cause as much damage as hurricanes because they tend to strike smaller areas. “Tornadoes are like pinpricks,” he said.
What’s more, while they occur often, they frequently touch down in rural areas of the country that are sparsely populated and with little development.
Wednesday’s storms were different.
A spokesman for Montgomery-based Alfa Mutual Group, Alabama’s second-largest homeowners insurer, told the Mobile Press-Register that more than 15,000 claims had been made by Thursday evening and that he expected that figure to rise rapidly in the coming days.
In addition to Alabama, where 210 people are believed to have been killed, deaths also were reported in Mississippi, Tennessee, Arkansas, Georgia, Virginia and Louisiana.
The economic impact has been significant. According to Reuters, the tornadoes battered Alabama's poultry industry and damaged at least one coal mine and other manufacturers and industries.
The second-largest U.S. nuclear power plant, the Browns Ferry facility in Alabama, may be down for weeks, Reuters reported, after its power was knocked out and the plant automatically shutdown, avoiding a nuclear disaster, officials said.
In addition, apparel producer V.F. Corp (NYSE:VFC) said one of its jeanswear distribution centers, located in Hackleburg, Alabama, was destroyed and an employee killed.
VF Chief Executive Eric Wiseman said on a call with Wall Street analysts Friday morning that the loss of inventory would have an impact on business in the current quarter results but not affect full-year results.
“We have a team of VF associates on the ground there right now working hard to assess the situation and determine the appropriate next steps for helping our colleagues, and working on a plan for business recovery,” Wiseman said.
Obama declared the region a disaster area and the Federal Emergency Management Agency said assistance would be made available for temporary housing and home repairs, low-cost loans to cover uninsured property losses, as well as other programs to help individuals and business owners recover.