Compared to the people who have had their lives knocked around by either Hurricane Harvey or Irma and possibly Jose, the least Americans can do is pay a little more at the gas pump and not complain. Still, if you're often living paycheck to paycheck, you can be forgiven for wondering how the active hurricane season will affect prices around the country. Here are some educated guesses.
In some ways, the question is pointless. Who cares? Who cares how much Americans across the country will end up paying out of their bank accounts and
with their credit cards? Compared to the people who have had their lives knocked around by either Hurricane Harvey or Irma and possibly Jose, the least Americans can do is pay a little more at the gas pump and not complain.
Still, if the sun is shining where you live, and you’re often living paycheck to paycheck, or you’re finally getting a little money saved up, you can be forgiven for wondering how the active hurricane season will affect prices around the country. So while these are all educated guesses, some experts think the following areas may be
affected by the hurricanes.
Gas. Gas prices shouldn’t go up much higher than they already have, assuming Hurricane Irma and any other hurricanes this season stay away from Texas. That said, fuel prices at the pump have something of a question mark over them.
“We’ve seen the biggest impact from Harvey over the last week,” says Joshua Starnes, who is based out of Houston and is the director of oil research, Americas, for Thomson Reuters, a media and information company.
Starnes points out that the Colonial Pipeline Co., which is the country’s largest fuel system and transports 2.5 million barrels of oil a day, has started sending fuel from the Gulf Coast to the East once again.
He doesn’t see Irma having the same affect on what it will take to fuel up your SUV. Florida, after all, isn’t known for its oil refineries — and with gas not being transported to Florida and the Caribbean (it’s primarily shipped by boat to this region) until the hurricane passes, the supply could actually be pushed up for the rest of the country and prices could actually lower, Starnes says.
“The X factor will be if Irma comes far enough inland to disrupt Colonial as it moves into North Carolina or ends up moving up the Eastern Seaboard,” he says. “Either one of those actions will constrain New York supply and drive up national gas price in sympathy.”
Insurance premiums. Your insurance for your home or auto could be affected by the hurricane season. Typically, premiums don’t go up from one hurricane, even a devastating one, according to Mike Christian, CEO of Risk Strategies Company, a national insurance brokerage and risk management firm based out of Boston.
But a season of particularly damaging hurricanes, such as in 2005 when the country had hurricane Katrina, Dennis and Rita, can send up insurance rates, Christian says.
“Typically, a storm has to generate losses in the $50 to $100 billion range to have a material effect on premium rates,” he says.
As for how much insurance rates might go up, it’s hard to say, and Christian points out that Hurricane Harvey may not affect the country’s collection premiums as much as you might think. What’s devastating for the victims of Harvey may be a price break for everyone else.
“For the insurance industry, it’s the insured loss numbers that count. In Harvey, rain and flooding seemed to be the prime mover of loss, and most people and businesses in the affected regions did not have flood coverage,” Christian says.
But with Irma, Christian adds that wind may drive most of the damage in Florida, and wind loss is typically covered in a property and casualty policy. So if your premiums climb later this year, or next, that’s probably due to Irma.
Some groceries and clothing. For the most part, Hurricane Harvey didn’t do too much damage to the agricultural scene, according to Daniel Redo, head of agriculture research at Thomson Reuters.
But Irma could be another story, Redo notes. He says that orange juice, sugar cane and cotton industries could all be affected, depending where Irma lands.
“Florida accounts for roughly half of all sugar cane in the U.S. and more than two-thirds of orange production. Georgia and the Carolinas account for roughly 25 percent of upland cotton,” he says.
The economy as a whole. There will be some turbulence, but it might shake out all right in the end, according to David Fiorenza, an economics instructor at the Villanova School of Business at Villanova University.
The negative is that with some of the businesses that are destroyed, jobs will likely be lost in South Texas and much of Florida, Georgia and parts of the Carolinas. Unemployment could go up, and due to a presumed decrease in wages, fewer taxes will be paid to cities, states and the federal government, Fiorenza predicts.
“Tax revenues in the current calendar year will decrease and cities will dip into any emergency funds or rainy-day funds they may have and continue to seek assistance from FEMA and the federal government,” he says.
But on the plus side, assuming that most residents and businesses rebuild, that could be a helpful, healthy shot in the economic arm, benefiting the entire country. There are ample businesses around the nation that manufacture or sell products that the construction industry in hurricane-devastated areas will need, Fiorenza says.
“The construction industry will see an increase as new homes affect every trade including lumber, electricity, plumbing, HVAC, glass, aluminum and others. If there is a positive, it’s in this area,” he says.
[See: 10 Money-Saving Websites to Check Before Shopping.]
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How the Hurricane Season Will Affect Our Wallets originally appeared on usnews.com