Although insured losses from Hurricane Katrina are estimated at a record high $34.4 billion, the property/casualty insurance industry will weather the storm of more than 1.6 million claims spread out over six states without the market disruption that occurred following 1992’s Hurricane Andrew, the previous record-setting storm, according to the Property Casualty Insurers Association of America (PCI).
Late Tuesday, ISO’s Property Claim Services (PCS) released its preliminary estimate of insured losses. These figures highlight the magnitude of the devastation. As expected, the figures show Louisiana was hardest hit by the storm suffering $22.6 billion in insured losses and 900,000 claims. Mississippi’s insured losses are expected to reach $9.8 billion with 490,000 claims. The insured losses for Alabama are estimated at $1.3 billion and 123,000 claims. These are record setting losses for Louisiana and Mississippi. These damage estimates do not include losses to utilities, agriculture, oil drilling platforms and property insured under the National Flood Insurance Program (NFIP). Initial property loss estimates for the NFIP are around $20 billion.
It is estimated that over 10,000 insurance adjusters are in the field processing the over one million claims that will be filed as a result of Katrina and are also working a yet to be determined number of claims resulting from Hurricane Rita.
As you can imagine from the sheer volume of the claims and the complexity of assessing some damaged structures, it may take some time to process all of the claims. Insurers are reportedly responding as quickly as possible and consumers are urged to be patient as the adjusters work their way through the damaged areas. Recovery from any storm of this magnitude is a long and challenging process. However, the industry is reportedly doing everything possible to help settle claims quickly and fairly.
Hurricane Katrina also caused significant damage to businesses along the Gulf Coast. The PCS estimates place the insured losses at more than $12 billion. These losses are comparable to the total of all insured losses from catastrophes in 2003. If the commercial losses from Katrina were treated as a separate catastrophic event they would rank only behind Hurricane Andrew, Sept. 11, 2001 and the Northridge, California earthquake in 1994.
Just as the numbers from Katrina are being released, the National Hurricane Center announced that Tropical Storm Tammy had formed and was slowly approaching the Florida coast.
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