While property/casualty industry expects insured losses from Hurricane Katrina to reach a record high of $34.4 billion, the Property Casualty Insurers Association of America says insurers 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.
According to the ISO Property Claim Services, 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. Because of the sheer volume of the claims and the complexity of assessing some damaged structures, the industry says it may take some time to process all of the claims. PCI reports that insurers are responding as quickly as possible, but urge consumers to be patient as the adjusters work their way through the damaged areas.
Commercial Losses Exceed $12 Billion
Hurricane Katrina also caused significant damage to businesses along the Gulf Coast. The PCS estimates place the insured losses at over $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.
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