The massive tornado that tore through the town of Moore, Oklahoma, on Monday afternoon did an estimated $2 billion in damage, putting it on track to become the most expensive tornado in US history.That’s according to the preliminary damage estimate Oklahoma Insurance Department released yesterday, just two days after the monster twister flattened the Oklahoma City suburb destroying 13,000 homes and killing 24 people, including nine children.The tornado is certainly the largest single catastrophe insured loss event of the year on US soil. A spokeswoman for the Oklahoma Insurance Department told the Associated Press the early estimate is based on visual assessments of the extensive damage zone.Oklahoma Insurance Commissioner, John Doak, told Reuters in an interview that losses from the Moore tornado were also likely to be greater than those suffered in Joplin. If this is accurate, Monday’s tornado could become the largest single tornado loss that insurers and reinsurers have ever suffered.The Joplin, Missouri tornado in May 2011, which was also a level 5 on the enhanced Fujita scale, killed 161 people, but had a smaller trail of destruction. The twister destroyed more than 7,000 homes and caused an estimated $2.2 billion in insured losses — making it the most expensive tornado in US history.Wall Street analysts from Morgan Stanley have also estimated that property casualty insurers are likely to face at least $2 billion of insured losses from Moore tornado event.Steve Bowen, of global reinsurance firm Aon Benfield, estimates that the Moore tornado could become only the fourth in world history to cause non-inflation adjusted economic losses “beyond $1 billion”.So far this year, not including this most recent five-day tornado outbreak, severe storms have caused $3.5 billion in economic losses in the US, Mr Bowen said. Of that $3.5 billion, at least $2 billion was covered by insurance.“By the time the current system finally winds down by the middle of this week, I wouldn’t be surprised if this ends up as the costliest US natural disaster event we’ve seen so far in 2013.”The US National Weather Service (NWS) has now upgraded the severity of the tornado saying that evidence indicates it was an EF-5 event with winds of at least 200mph.The NWS also said the path of Monday’s tornado was more than 17 miles long, 1.3 miles wide and that it was on the ground for approximately 45 minutes.Preliminary damage estimates by Risk Modelling firm AIR Worldwide place replacement value of properties between $2.2 billion and $6.4 billion.Dr Tim Doggett, senior principal scientist, AIR Worldwide said: “In all, this system produced 22 tornadoes on May 20, largely in Oklahoma, although tornadoes were also reported in Missouri, Texas, Kansas, Arkansas, and Colorado. However, of these 22 tornadoes, the Moore event was by far the most damaging.”Fortunately, people whose homes were damaged or destroyed should be fully covered for the damages, said Robert Hartwig, president of the Insurance Information Institute. Standard homeowner’s insurance policies cover the destruction caused by high winds, hail and the rain that enters the home through damaged roofs and walls, he said.That contrasts with hurricane damage, which requires special insurance for any flood damage and often carries heavy restrictions including hurricane deductibles, which require homeowners to pay a percentage of the home’s value before insurance kicks in.Insurers should also be able to respond more quickly than after Superstorm Sandy. With that storm, there were 1.5 million claims whereas this storm will involve a few thousand.A report released earlier this year by Lloyd’s of London showed the US experiences more tornadoes than anywhere else in the world and that the resulting long term average losses are on par to those from hurricanes. In 2011, the US reported a record-breaking 1,600 tornadoes with more than $25 billion in damages. Last year, severe thunderstorms and tornadoes caused $15 billion in US insured losses.Whatever the insured losses from the Moore tornado and other tornadoes associated with recent storm outbreaks, it’s not expected to be particularly impactful to the re/insurance market. Insurers and reinsurers right now are well capitalised and the markets have not suffered any major catastrophe losses in recent months, which means they will likely be able to absorb this loss.Loss estimates from risk modelling firms such as EQECAT, RMS and an update from AIR Worldwide will likely be made available over the next week or so.