Insurance claims filed in the wake of the tornadoes that devastated parts of six states and claimed at least 88 lives last weekend could result in $5 billion in insurance payouts.
The potential payout number would make it one of the most costly tornado disasters ever, according to the Wall Street Journal. Aon PLC data reported by the outlet show the costliest tornado disaster to take place a decade ago, when storms hit Tuscaloosa, Alabama and caused $8.5 billion in 2020.
Standard auto- and home-insurance policies typically cover wind damage, unlike flooding. However, insurance companies sometimes look to limit exposure by charging special deductibles, the Journal reported. The deductibles in the six states affected by the tornadoes are less than those for coastal homes needing hurricane coverage.
By Thursday afternoon, State Farm had received upwards of 11,000 claims from the six affected states, according to the Journal. Kentucky led the way with almost 1,800 claims, while Tennessee had the second-most claims. USAA, meanwhile, had received almost 2,000 claims by early Thursday.
Arkansas, Illinois and Missouri were also affected by the storms.
“Some parts of town are still standing, but for the most part it is just total devastation,” Steve Jones, an agent for an insurance company in hard-hit Mayfield, Kentucky, told the Journal.
Mayfield is the small city in southwest Kentucky where about 110 people sheltered in a local candle-making factory, requiring dozens to be rescued after the storm touched down. According to the Courier Journal, at least eight were killed there.
While Fitch Ratings has raised the possible insurance losses to nearly $5 billion as a result of the storms, that still pales in comparison to other major storms in 2021, including February’s Winter Storm Uri, which had an insured cost of $15 billion, the Journal reported.
Hurricane Ida had an even more devastating economic impact this summer, costing insurers about $40 billion, according to Fitch.
[WSJ] — Holden Walter-Warner
The post Insurance payouts from deadly tornadoes could hit $5B appeared first on The Real Deal Los Angeles.
Powered by WPeMatico