Officials, Insurers Begin Tallying Damages from Deadly Storm

By Michael Adams | April 29, 2011

Officials in Southeast states hammered by a storm that killed at least 300 people have begun the task of evaluating the damage.

Alabama appears to have suffered the brunt of the storm, where Tornadoes struck particularly hard in Tuscaloosa and Birmingham. Although officials had advanced warning of the storm, “you cannot prepare against an F-5 tornado,” said Alabama Gov. Robert Bentley.

Alabama Insurance Commissioner Jim Riding said that he is reaching out to the state’s property insurers to provide a coordinated response to the storms. “We want to hit the ground running to deliver an effective response to all Alabamians affected by these tragic storms,” he said. “As soon as the companies settle on locations for their disaster response headquarters, we will share that information with the public.”

State Farm Spokesperson Jim McCullen said that said — by mid-Thursday — the insurer already had 3,300 claims in Alabama and rising. More than 2,500 agents, adjusters and catastrophe managers were actively responding to the crisis. He said that the company was somewhat fortunate in that it already had teams working in Arkansas in the wake of a series of tornadoes that went through the South Central portion of the country earlier this month.

“For the first time since Katrina we have all of our 13 catastrophic response teams in the field,” McCullen said. “Fortunately, we had teams in the areas so we’re not having problems moving people around.”

The Property Casualty Insurers Association of America (PCI) offered tips to policyholders, such as contacting their agent, inspecting their property for damage and checking the background of repair contractors when it comes time to rebuild.

“We know that many lost loved ones and suffered catastrophic property damage,” said Christopher Hackett, PCI’s director of personal lines policy. “Insurance adjusters are in the field now, working to help victims of this storm put their lives back together.”

The American Insurance Association (AIA) offered condolences while stressing that the industry is quickly sending their catastrophic response teams into the affected areas “Insurers are already communicating with policyholders in a variety of ways including social media,” said AIA Assistant General Counsel Jim Whittle. “Claims representatives should be out in the field as early as this morning.”

The National Weather Service Prediction Center said April may be a historic month for confirmed tornadoes. The record in April is 116 tornadoes, a figure that could be smashed if the weather service is right in projecting that this April there may be more than 300 such storms.

According to the Insurance Information Institute over the past three years property insurers have paid out over $30 billion in claims due to tornadoes and thunderstorms.

One of the worst tornado outbreak in U.S. history occurred in April 1974, when 148 tornados covered 13 states over a 165-hour period killing 330 and injuring 5,484. RMS estimated that the final damage tally for the storm exceed $3 billion. The April 1974 storm resulted in the US Congress passing the Disaster Relief Act, which saw the formation of the Federal Emergency Management Agency.

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