Businesses tallying Gustav's toll

Insurers say tab could reach as high as $10b

Wind from Hurricane Gustav caused damage to an airboat ride company in Des Allemands, La. (Essdras M Suarez/Globe Staff)

BEAUMONT, Texas - Residential and commercial insurance claims could total $4 billion to $10 billion. More than a million customers, including some refineries, lack electricity. And retailers are gearing up for a burst of sales once residents who fled the Gulf Coast return.

Snapshots of Hurricane Gustav's economic impact revealed yesterday that the storm was hardly as damaging as feared - particularly for the region's vast network of energy facilities. But it will be days, if not weeks, before business as usual returns.

While Gustav's force paled in comparison to Hurricane Katrina, which cost insurers $41 billion, oil workers, utility crews, fishermen, and other business owners fanned out across the Gulf Coast yesterday to assess damage and make preparations to restart operations. Outside a Lowe's in Houma, La., sales manager Britt Coyle said there was only minor damage to the store, which he expected to be open today to sell chainsaws, generators, and other necessities to residents returning home.

At the nearby Jolly Inn restaurant, the owners had a diesel generator powering their refrigerator to prevent thousands of dollars of food from spoiling. Denise Prosperie-Fritch, whose family owns the Jolly Inn and rode out Gustav inside the restaurant, said the establishment is insured but that they only have one or two days' worth of fuel left to keep the food cold.

"We will be addressing our hardest-hit policyholders first," a spokeswoman for Nationwide Mutual Insurance Co. said. "Those homes with a tree through a wall, an exposed roof, or other claims in which the home has become uninhabitable are the priority."

Meanwhile, utilities started dealing with the task of restoring power. Utility giant Entergy Corp. said 826,000 customers, mostly in Louisiana, were without power. A Royal Dutch Shell-owned refinery in Convent lacked power late yesterday, as did the company's chemical plant in Geismar. The power outages also brought down cellular and Internet service in parts of Louisiana.

Entergy did not have an estimate on when power might be restored, saying it could be weeks in some instances. "Our transmission system has had massive damage," Entergy spokesman Mike Burns said.

Gustav also created problems for the region's oyster industry.

Mike Voisin, owner of an oyster processing plant in Houma and president of the Louisiana Oyster Task Force, said Louisiana won't be producing oysters for at least a week to 10 days, depending on how quickly officials can ensure oyster beds have not been contaminated by floodwaters carrying bacteria. Similar closures were set in Alabama and Mississippi as Gustav approached.

Residential and land-based commercial losses, including costs associated with business interruption, were expected to total between $3 billion and $7 billion, Newark, Calif.-based Risk Management Solutions Inc. estimated. The firm estimated damage to oil platforms and wells, as well as production interruption caused by wind and waves, at about $1 billion to $3 billion.

Insurance industry analysts warned that computerized data on insurance losses may understate actual costs because the figures don't include damage to uninsured property or destruction caused by actions excluded from some policies, such as flooding. Total losses won't be known for months.

In Mississippi, regulators say the 11 casinos along the Gulf Coast will remain closed until crews finish cleaning up from the storm and an adequate number of employees return to work.