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Harvey costs seen rising to US$42b as flooding intensifies

[NEW YORK] Estimates for damages caused by Hurricane Harvey are climbing with the storm poised to regain strength in the Gulf of Mexico before crashing back on land.

Risk modeler Chuck Watson of Enki Research on Tuesday lifted his projection for economic losses to US$42 billion, up about US$12 billion from Monday.

"We have assumed more damage and obstruction to the drainage and flood-control systems than was the case yesterday," he said in a note to clients.

Analysts including David Havens at Imperial Capital have estimated the costs could top US$100 billion, potentially causing more havoc than Hurricane Katrina in 2005, which spurred at least US$118 billion of losses.

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About 47 per cent of that was insured, while insurance brokers have said a lower portion of Harvey's costs will be covered because regular homeowners' policies don't include flood damage.

"You're not going to lose everything," Mr Watson said by phone.

Those assuming more than US$100 billion in damages are "assuming a lot of structures are going to be totalled with 100 per cent losses rather than partial losses".

BLOOMBERG