As the US East Coast struggles to recover after the devastation brought by Hurricane Sandy, the damage estimates are going up.Hurricane Sandy may cost the insurance industry as much as $20 billion according to new damage estimates by disaster modelling firm, Eqecat. That would make this week’s storm the third most expensive ever, when it comes to insured losses.“This places it as the largest weather loss since at least Hurricane Ike in 2008 and depending on where we end up with this, it’s very possible that Sandy’s insured loss could be as great or actually larger than anything that we’ve seen since Hurricane Katrina in 2005,” said David Smith, senior vice-president of model development for Eqecat.Hurricane Katrina tops the list of most expensive hurricanes ever causing $46.6 billion in insured losses, Hurricane Andrew in 1992 comes in second with $22.9 billion of insured losses and Hurricane Ike comes in third with $13 billion, all figures in 2011 dollars.If Eqecat’s new estimate is correct, it would also make Sandy one of the top 20 global natural catastrophes since 1970.The new estimate does not include damage from flooding, which some consumers can purchase separately through a US federal government programme.Eqecat, a California company that estimates the cost of catastrophes, is now predicting insured losses of between $10 billion and $20 billion. That estimate is double the figures Eqecat suggested earlier this week and is based on post-landfall observations. Factors influencing the revisions include the large electric and utility losses that Eqecat says will “trigger significantly more insured losses (business interruption) than were expected from a more typical Category 1 storm.”The company said the total cost of the storm, including damage that wasn’t insured by private companies, would be between $30 billion and $50 billion.Estimates from Eqecat and other disaster-modelling firms are tracked closely by the insurance industry for the early indications they give on the likely costs of major disasters.The firm says power outages are expected to “trigger significantly more insured losses (business interruption) than were expected from a more typical category 1 storm,” and the shutdown of the subway and tunnels in New York City will lead to higher expectations of loss amplification.Another catastrophe modelling firm, AIR Worldwide, estimates ‘Superstorm’ Sandy will cause between $7 billion and $15 billion in insured losses.The estimate includes wind and storm surge damage to residential, commercial and industrial properties and contents, as well as automobiles. Additionally, the estimate includes additional living expenses and business interruption. It also takes into account demand surge.Fitch expects that the re/insurance industry will be able to absorb this level of losses given its solid capital position with below-average catastrophe losses experienced thus far in 2012. At the high end of the range, a $20 billion loss represents a manageable four percent of US industry capital.Fitch anticipates that primary insurers will bear a greater share of losses at the low end of the range. However, as industry losses reach $10 billion and higher, the reinsurance industry will receive a greater share of losses.