By DAN WISNIEWSKI, a Philadelphia-based journalist
The tornados that touched down in the Dallas-Fort Worth area in early April may wind up being some of the costliest tornados Texas has ever seen.
Damage claims for the 17 confirmed tornados have already hit $300 million, and could reach $500 million, according to Sandra Helin, president of the Austin-based Southwestern Insurance Information Service.
By way of comparison, a March 2000 tornado that struck Fort Worth caused $445 million in insured losses and remains the costliest tornado on record in Texas, according to the Insurance Council of Texas.
According to an A.M. Best study, tornados caused an average $4.9 billion in property/casualty claims nationally each year between 2001 and 2007.
A more accurate estimate of the damage costs from the April 3 storm should be available soon, but insurers can expect to handle "hundreds, if not thousands, of claims," said Mike Barry, vice president of media relations at New York's Insurance Information Institute. Barry added that nearly 1,100 residential claims for partial or complete destruction of homes have been filed so far, though no commercial estimates are available yet.
The most difficult challenge for claims adjusters moving forward is getting an inventory of what each homeowner and business owner lost in the storm.
"Most folks don't have a prior inventory of their possessions, and they have to try and remember what they lost and the value of those possessions," said Helin. "Sometimes that can add weeks to the claims settlement, as people who have suffered a trauma have so much more on their minds."
Mobile catastrophe vans responded within 12 to 24 hours of the April storm event, said Barry, and set up areas where people could file claims and get assistance on how to begin to recover economically. But reaching those who are affected can be a challenge.
"Any time there's so much damage in a condensed space, it's usually an issue of getting a sufficient number of adjusters to the scene to figure out exactly what the insured losses are," he said.
When it comes to commercial damages, the goal for most insurers is to get affected businesses back up and running. "The insured losses for Business Interruption Coverage claims add up every single day," said Helin."We are seeing some 'out-of business' losses averaging $15,000 to $20,000 each week."
Compared to 2011, 2012 so far has seen a greater number of tornados. Through March 25, there were 379 preliminary tornado reports, compared to just 154 for the same time period last year.
But even though the number of tornados has more than doubled this year, catastrophe claims overall have decreased significantly. Earlier this week, Barclays analysts noted that U.S. catastrophe losses were at $1.6 billion for the first quarter of 2012 -- down from $2.2 billion in 2011's first quarter.
April 23, 2012
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