Budget Update -- Katrina's Cost

It will be some time before officials will be able to fully assess the amount of disaster relief funding that will be necessary in the wake of Hurricane Katrina, but it is already becoming clear that the costs of responding to Katrina will vastly exceed any previous natural disaster in the U.S. Though the specifics of any one disaster cannot be anticipated, they are an unfortunate, costly, and regular reality. Budgeting for disasters is part of being prepared for these recurring tragedies.

Insured losses for Katrina have been estimated to be as high as $25 billion, but that number could increase. The general rule has been that total losses are double insured losses, but much of the damaged caused by Katrina is flood damage, which is not covered by private insurance. Thus the ratio of public to private costs is likely to be much larger for this disaster.

For the complete document, please see the attached PDF version.