Auto Insurance Cos. See Flood of Claims from Southern Storms

The images broadcast nationwide showing the devastation from the recent tornado outbreak gave Americans a sense of the size of the catastrophe, and now numbers coming from car insurance companies and state regulators are helping to further quantify the extent of the damage.

According to risk-modeling company AIR Worldwide, the thunderstorms slamming American residents between May 20 and 27 alone could leave between $4 billion and $7 billion in “incurred losses to residential, commercial and industrial properties and their contents and to automobiles.”

Home and car insurer State Farm announced in late May that, even before being able to factor in all of the claims from the most recent string of tornadoes, it already had paid out nearly $916,000 to compensate for storm-related damages.

The severity of the Joplin, Mo., tornado is evident in the influx of insurance claims filed. According to state regulators, about a week and a half after the tornado touched down and wreaked havoc, there had already been nearly 17,000 claims filed (and that was just from companies accounting for 72 percent of the state’s homeowners coverage market).

Of those nearly 17,000 claims, the largest proportion was filed under personal auto coverage. Almost 9,000 claims — about 53 percent of the total — were car-related.

Six days after the St. Louis tornado that touched down in late April, residents in that city had filed a total of 6,795 claims, about one-third of them being filed under auto policies.

According to the Insurance Information Institute (III), this year will be “among the most deadly and expensive for tornadoes in history,” bringing an estimated $4 billion to $10 billion in economic loss.

The III notes that the property-casualty insurance industry should be strong enough to handle the surge in claims.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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