State Farm Insurance Co. has paid out about $12 million in claims with more still coming in after a Kansas tornado that destroyed a town two weeks ago and killed at least a dozen people, the company said.
Home and auto claims paid by State Farm, the largest insurer in Kansas, already have doubled the estimated $6 million that will be paid by the state’s second-largest insurer, Madison-Wis.-based American Family Insurance Co.
State Farm spokesman Jeff McCollum said the company could pay up to 700 auto and homeowner claims in the wake of the May 4 twister that destroyed more than 90 percent of the buildings in Greensburg, a south-central Kansas town that had about 1,400 residents before the storm.
McCollum said payouts will be relatively small by company standards because the tornado,, which was 1.7 miles wide and reached speeds of 205 mph, passed through a lightly populated area.
“This is not going to be one of our biggest losses, but it’s significant because there were such dramatic losses in such a small area,” McCollum said.
The Bloomington, Ill.-based insurer’s largest payout ever came after hurricanes Katrina, Wilma and Rita in 2005, netting more than $6.4 billion in claims, McCollum said.
A team of adjusters and other staff members remains in Greensburg, helping policyholders as they assess losses from a tornado that also destroyed the home and office of the town’s lone State Farm agent, McCollum said.
State Farm posted a record $5.32 billion (euro3.95 billion) profit in 2006 amid a tranquil year for hurricanes and other natural disasters.
Catastrophe losses last year totaled $2.6 billion, down from $6.7 billion in 2005 when Katrina and other tropical storms battered the Gulf coast.
Analysts predict insurers’ profits will dip this year, with more severe weather expected.
State Farm is a privately held mutual company, owned by its policyholders. Its holdings include auto, property, health and life insurance companies, as well as banking and mutual fund operations.
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