By TRACEY DRURY
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Hurricane Sandy is expected to have a $10 million impact on Merchants Insurance Group, likely wiping out any potential profits for the Buffalo-based company.

Robert Zak, CEO, said Tuesday the company had been on track for a profitable year, with sales projected for 2012 in the range of $245 million to $250 million. But with up to 4,000 claims expected from policyholders affected by the storm, projections call for at best a break-even year, he said.

"The net impact to the company will be $10 million, and will be limited to $10 million because we buy insurance for events like this," he said. "This will cause us to have a break-even or slightly better year, but that's what we're here for."

The company's residential and commercial customers along coastal areas were hit hard by the Halloween-week storm. The group offers insurance for homeowners and automobile owners, as well as contractors and business owners in nine states, including several hit by last week's storm. The majority of claims so far are from the New York-New Jersey area, especially policyholders in coastal areas, Zak said.

As of Tuesday morning, the Buffalo-based company had received more than 1,800 claims. As homeowners continue to assess their losses with help from more than 50 Merchants' adjusters on the ground, the company expects to receive 3,000 to 4,000 claims in all.

"The stories from the people that have been affected are just heartbreaking," he said. "What's been remarkable is how positive and how patient they have been. They're really just hanging in there very well."

In addition to damage from downed trees and power lines, there's the continued possibility of frozen pipes if temperatures drop overnight and customers remain without power, Zak said.

"It's a more difficult event to predict because so many people are still having trouble with communication," he said.

Despite the losses from Sandy, the company will end up in better shape financially than last year, when it lost $8 million after a rough claims year that included Tropical Storm Irene, several snowstorms and other severe weather events.

"This year will be better, as the only significant event has been Sandy," Zak said.

Sales have been steadily climbing for Merchants: This year's projection is up from $245 million last year and $234 million in 2010.

Founded in 1918, Merchants Insurance Group includes Merchants Mutual Insurance Co. and Merchants Preferred Insurance Co. The company employs about 330.

Customers are being serviced through the Buffalo office and sites on Long Island in Hauppauge and in Mount Laurel, N.J. While the New Jersey office was offline for just one day last week, the Long Island site was closed for a full week. Claims staff in Buffalo have been working extra hours and weekends.

Claims are being accepted through a toll-free line (800-952-5246), as well as online and through its smartphone app.