III Advises Policyholders on Filing Claims for Storm-Related Damages

The Insurance Information Institute (III) is predicting thousands of East Coast residents will file claims for damages on their auto and homeowner policies after a weekend snow storm—the third weather-related disaster in as many months—struck the region.

More than two dozen people have died and a million residents of multiple states remained without power Wednesday as a result of the unexpected storm, according to The Associated Press. The Federal Emergency Management Agency (FEMA) reported that President Obama has declared emergencies in two of the hardest-hit states—Massachusetts and New Hampshire—freeing up federal disaster recovery funding there.

Car being towed out of snowIII officials said snow and ice storms—including those that happen before the official onset of winter, which is Dec. 21 this year—are the third-largest causes of catastrophe losses for U.S. insurers, trailing behind only hurricanes and tornadoes.

Insured losses from winter storms last year totaled $2.6 billion, according to a report issued in January by Munich Re, and III says winter storms caused $25 billion in private-sector insurer payouts from 1990 to 2009.

Michael Barry, vice president of III, said standard auto, homeowner and business policies cover a broad range of losses—everything from shattered windshields to burst pipes and collapsed roofs.

He pointed out that the portions of a vehicle policy that claims may be filed under will vary depending on the nature of the damage.

“Car accidents caused by slippery road conditions are … covered under standard auto insurance policies,” he said, as are crashes involving two or more drivers that result from snow and ice on roadways.

A vehicle that crashes into a tree or other object would likely be covered under optional collision coverage, which protects the policyholder financially against damages from running into a car or other object. And physical damage inflicted by high winds, flooding or falling tree limbs would fall under the comprehensive portion of a vehicle policy, which is also optional.

“Consumers who need to file (a claim) should contact their insurance agent or company representative as soon as possible,” Barry said in a news release. “Let your agent know the extent of the damage to your property and start to document your loss with lists, receipts or photographs.”

The recent storm arrived less than three months after Tropical Storm Irene swept along the East Coast, killing dozens of people and causing billions of dollars in damage. III has estimated that insurers will pay out as much as $5 billion on Irene-related claims for insured losses on everything from auto insurance in Maine to homeowner coverage in Virginia.

Many residents were punished again when Tropical Storm Lee swept across the East and Gulf Coasts over the Labor Day weekend.

The most recent storm is expected to mean further losses for insurers who have already faced a costly year so far due to natural disasters in 2011.

Several major insurers—including Allstate, State Farm and Progressive—have seen their profits tumble as a result of catastrophic weather events. ISO and the Property Casualty Insurers Association of America (PCI) announced in October that severe weather events cut profits for property/casualty insurers from $16.8 billion during the first six months of 2010 to $4.8 billion for the same period this year.

ISO said catastrophes caused $23 billion in direct insured losses for insurers, up $14.1 billion from 2010 and about three times the average for first-half losses over the past decade.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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