David L Ryan/Globe Staff Photo

In 1938, when storm-watchers gave hurricanes names fit for railroad lines, the Great New England formed off Africa’s western coast, hurtled across the Atlantic and turned north, making landfall in Central Long Island.

Winds as fast as 130 miles per hour blew across the peninsula, sweeping a Westhampton movie theater out to sea, toppling the tallest building in Sag Harbor and turning Montauk into an island. In Manhattan, streets three blocks inland from the East River flooded, and the Empire State Building is said to have swayed. By the time the storm finished cutting through New England and into Canada, some 57,000 homes were destroyed, and as many as 800 lives lost.

When present-day risk experts think about the worst-case scenario for the New York region, they base their assumptions on the Great New England.

That wasn’t even a direct hit. “If you take that storm and put it on the Irene track, then you get multiples and multiples of the damages,” said Karen Clark, the chief executive officer of catastrophe risk firm Karen Clark & Co. and the mother of the catastrophe-modeling industry.

The Great New England cost the insurance industry $35 billion in 2012 dollars, according to Ms. Clark’s research. Move a hurricane of the same force through the center of today’s Manhattan, and the results are terrifying: a storm surge to put Sandy to shame, flooding Manhattan, razing the boroughs, blowing water towers off the rooftops and crashing debris through the city’s flashiest office buildings and luxury high-rises.

Ms. Clark said her worst-case storm would cost insurance companies $100 billion, five to 10 times the damage inflicted by Sandy and double the destruction caused by Hurricane Katrina.

“I shouldn’t say ‘if,’ I should say ‘when,’” Ms. Clark told us. “This is going to happen.”

SO HOW DO COMPANIES insure against $100 billion in damage? Here’s a scenario just as terrifying as another Great New England: they don’t.

That’s what happened in Florida after 2005, when insurance companies tried to hike rates in the wake of a string of hurricanes starting with Hurricane Andrew (1992, insured costs of $21 billion) and continuing through that year’s Katrina, Rita and Wilma.

The state balked, capping premiums. The insurance industry took its ball and went home, to a large extent calling the Sunshine State closed for business. The state stepped in, funding an insurance program of its own and putting its already shaky finances to the wind: in 2011, the state’s Citizens Property Insurance Corp. had a total exposure of $510 billion.

Could that happen here? If Albany seems rife with upstate vs. city tension now, imagine asking Onandaga County residents to hold the bag for Hamptons mansions deemed too expensive and risky by insurers.

“There’s a very real question about the future of insurance affordability and availability,” said Cynthia McHale, director of the insurance program at Ceres, which advocates for investors on sustainability issues. “Insurers always have the option of pulling out of a region. Or the rates become really, really high and unaffordable. This is a reasonable scenario going forward.”

With two major hurricanes within 14 months, New York officials have jumped on the climate change issue in the weeks since the recent storm. Gov. Andrew Cuomo took Sandy as evidence that “climate change is a reality” and gestured at European systems for protecting coastal communities, such as the $4 billion locks completed in 1997 to protect the Dutch city of Rotterdam. Mayor Michael Bloomberg invoked the storm to explain his endorsement of President Barack Obama, citing the president’s record of facing up to global warming.

While climate modelers can debate climate change, nobody can argue with the pace of development along the coasts. The more homes there are in a vulnerable area, the bigger the companies’ tab when catastrophe strikes. “The elephant in the room is not climate change,” Ms. Clark said. “The real driver of increasing property losses from catastrophes is increasing concentration along the coasts,” she said.

As a rule of thumb, Ms. Clark says the total value of properties on the Atlantic doubles every 10 years. Insuring these buildings while avoiding massive losses has been a growing problem for the industry.

When Ms. Clark founded her first company, Applied Insurance Research, in 1987, insurers had been lulled into a sense of security regarding storms. After earning masters degrees in business administration and economics at Boston University in 1982, Ms. Clark went to work at a local insurance company, using meteorological data to assess her firm’s weather-related exposure.

In those days, the computing power needed to run the sophisticated models insurers depend on today didn’t exist, which was fine, since almost nobody perceived such a need. The U.S. had gone decades without a major hurricane landing, and insurance companies were grossly underestimating the risks involved. Ms. Clark’s models showed, for instance, that if a Category 5 hurricane hit Miami, the losses would be on the order of $60 to $70 billion.

“The insurance companies thought it was $7 billion,” she said. “They weren’t monitoring the trillions of dollars of property being built on the coastline.”

Hurricane Andrew created about $21 billion in insured losses, and the catastrophe-modeling business took off. In addition to the independent catastrophe risk companies like the ones that Ms. Clark has founded, reinsurers—insurers for primary providers like State Farm or Allstate, basically—have built teams of meteorologists, seismologists, flood experts and engineers to model the hypothetical damage. To understand the expected cost of a storm and, ultimately, how much property owners should pay for insurance, the modelers map tens of thousands of storms over real-life physical data.

While storms like Sandy and Irene have been priced into the insurance premiums property owners already pay, more frequent storms will mean higher rates, to the point that some properties will become bad bets for both insurers and owners. Most vulnerable are not only the areas pummeled by Sandy, but anywhere on the coast, including the Hamptons.

Is there anything to do but move to a landlocked state, then pray for no tornadoes?

Recently, New York City’s Panel on Climate Change studied the insurance industry’s relationship to potential global warming and recommended that insurers offer lower rates to homes built with storm-proofing materials and engineering.

Protecting their homes and families from future Sandys is an issue that looms large among residents of both Breezy Point, Queens, and Greenwich, Conn., where fires broke out during the height of the hurricane. In Breezy Point, a house fire spread to more than 80 homes, while a fire sparked by downed electrical wires consumed three Greenwich, Conn. mansions at the edge of the Long Island Sound. Those three homes alone were worth $20 million.

Residents of both communities will have to consider building with better materials and engineering in hopes of weathering the next great storm. But if what’s on the way is as bad as some believe, they might think twice about rebuilding altogether.

Sandy.

It's been a common reaction in the days after the hurricane, or post-tropical storm, or whatever we're calling the 1,000 mile-wide wall of wind and rain that blasted the Northeast on Monday, to blame the shocking wave of destruction on global warming.

New York Gov. Andrew Cuomo chimed in early and often, offering Sandy as evidence "that climate change is reality." Bloomberg Businessweek, ever a sucker for an arresting image, shouted "It's Global Warming, Stupid," from the cover of this week's issue. New York City Mayor Michael Bloomberg took a more measured approach—"If this is a trend, it is simply not sustainable"—but nonetheless, invoked this week's storm and underlined climate change in explaining his endorsement of President Barack Obama for reelection.

Meanwhile, estimates for the insured costs of the storm climbed as high as $20 billion, and we thought it would be worth hearing what the insurance industry had to say. After all, if the waters rise, the coastlines erode and changing weather patterns increase the frequency of tropical storms, insurance companies are going to incur large costs making good on property loss.

But when The Observer called the experts who build the sophisticated models that the insurance industry uses to assess risk, they told us that global warning wasn't the first factor responsible for the damage caused by Sandy and other recent storms. Instead, it's where we've built our homes.

“I don’t know that we have the historical track record to say that weather has become more volatile, but as a society we’ve become more vulnerable to weather risks,” said Megan Linkin, a hazard expert for reinsurer Swiss Re, told us over the telephone. “There are a lot of people who live in areas that are susceptible.”

"The big elephant in the room is not climate change," Karen Clark, founder of Karen Clark & Co., and the creator of the modern catastrophe modeling industry, concurred. "It's the increasing property values. We continue to build bigger, more expensive homes along the coast.”

That's not to say that climate change doesn't belong in the conversation on Sandy. Dr. Linkin's employer, Swiss Re, is among the industry players attuned to the issue. When the New York City Panel on Climate Change published its final report in 2010, it included a chapter on insurance. (Among its recommendations: insurance pricing incentives for policyholders who rebuild homes to be more resilient to extreme weather.) Rather, that to focus on climate change in the aftermath to Sandy might be to miss the forest for the trees.

Ms. Clark was at the vanguard of the catastrophe modeling game when she founded Applied Insurance Research in 1987. In those days, the U.S. had gone decades without a hurricane landing, and insurance companies were grossly underestimating the risks involved. Ms. Clark's models showed, for instance, that if a Category 5 hurricane hit Miami, the losses would have been on the order of $60 to $70 billion. "The insurance companies thought it was $7 billion," she said. "They weren't monitoring the trillions of dollars of property being built on the coastline."

After Hurricane Andrew created about $21 billion in insured losses, the catastrophe modeling business took off. In addition to the independent catastrophe risk companies like the ones that Ms. Clark has founded, reinsurers—insurers for primary providers like State Farm or All State, basically—have built teams of meteorologists, seismologists, flood experts and engineers to model the hypothetical damage. To understand the expected cost of a storm, and ultimately, how much property owners should pay for insurance,  the modelers map tens of thousands of storms over real-life physical data.

(For what it's worth, Dr. Linkin told us that Swiss Re hadn't built climate change into its model. "By including the most up to date information, if there is climate change present in the historical data, we're including it," she said.)

As Dr. Linkin pointed out, each of the hypothetical hurricanes in the catastrophe models is unique, though some more unusual than others. In the real world, storms are unique too. Certainly, much was made of Sandy's mix of tropical weather with blocking weather patterns from the north and west.

But as a destructive force, Sandy is less unusual. The so-called Long Island Express, a 1938 hurricane that wrecked the Northeast, racked up $35 billion in insured damages in 2012 dollars, according to a paper Ms. Clark published in August, a good sight more than the current estimates for $10 to $20 million in insured costs for Sandy.  A 1926 hurricane that leveled Miami caused insured costs of $126 billion by today’s dollars.

"Sandy was unprecedented, it's a 500-year, 1000-year event, when they focus on the meteorology,” Ms. Clark said. "The impacts of Sandy are not unprecedented." The way she tells it, we can expect more terribly destructive storms—not because of global warming, but because the concentration of population and property in harm's way.