Missouri’s Top Insurers Paid $400 Million-Plus to 2003 Tornado Victims

May 3, 2004

Missouri’s 30 largest auto and homeowner insurers in last May’s severe-storm areas paid out more than $400 million for damages, and the state’s overall losses will certainly top $500 million, Department of Insurance (MDI) Director Scott Lakin reported.

Lakin said the devastastion from tornados May 4 to 11, spawned by a stalled “super cell,” clearly emerged as Missouri’s second-most costly insured disaster ever, ranking behind only the April 2001 hailstorm in St. Louis County that could reach $1 billion in insured losses. The serious flooding of the 1990s largely did not involve private insurance.

The high-volume insurers have written checks for $401.1 million so far and reported almost $3 million in pending claims from the May 2003 tornados and related storms.

Overall, the 30 largest insurers reported 75,385 damage claims that week from all 115 Missouri counties, including St. Louis City. Of those, at least 29,753 affected autos and the remainder – 44,190 – involved structures. Damage to homes and businesses totaled at least $328.5 million.

The May 2003 damage raked Missouri from border to border, north, south, east and west. Lakin said insurance company reports so far indicate that his home area of Clay County suffered the most severe losses, with at least 3,945 building and 2,424 auto claims that yielded payouts of $56.4 million.

Jefferson County, south of St. Louis, registered payments of $38.4 million after a tornado seriously damaged DeSoto.

And the Ozarks had a large concentration of damage in multiple counties with payments reaching $29.5 million in Camden County (Camdenton), $20.3 million in Cedar County (Stockton), $14 million in Greene County (Battlefield), $9.6 million in Lawrence County (Pierce City) and $19 million in Jasper County (Carl Junction).

Other large payments included $13.3 million in Cape Girardeau County (Jackson); $19.9 million in Franklin County; $9.1 million in St. Louis County; and $5 million in Lewis County (Canton).

Lakin said the totals on losses should climb above a half-billion dollars because the MDI survey did not include:

* Claims paid by more than 100 smaller auto and homeowners insurers in the state. Also not included are any claims with 125 so-called farm or county mutuals, which account for considerable market shares in many hard-hit rural counties, particularly in the Ozarks.
* Deductibles paid out of pocket by policyholders. For example, assuming a common $500 deductible, auto and home owners would pay out almost $40 million besides their insurance settlements to restore damages.
* Losses suffered by uninsured property owners, including damages to public buildings and infrastructure such as roads.

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