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February 24, 2009 Tuesday 04:06 PM EST

535 words


Georgia Tornadoes Could Cause $35 Million in Insured Losses

Chad Hemenway

ATLANTA

About a dozen tornadoes that swirled their way through Georgia are estimated to have caused $35 million in insured losses, said Insurance Commissioner John Oxendine.

Oxendine flew over some of the more effected areas in Thomas and Grady counties, his office said. The commissioner said the $35 million loss estimate is "conservative."

State Farm spokesman Roszell Gadsen said the company has received more than 3,100 homeowners, automobile and business claims as of early Feb. 24. Much of the reported damage is to vehicles from large hail.

"Some cars we had to declare a total loss because of the extent of the cosmetic damage," Gadsen said. "The damages have exceeded our initial expectations. The numbers are already higher than we originally expected."

Georgia Farm Bureau received about 800 homeowners and auto claims as of Feb. 24 and has reserved about $7.5 million to pay claims related to the storms, said Bob Holton, director of claims for the company.

Allstate spokesman Shane Robinson said the insurer sent "well over 100" extra claim specialists to assist in the recovery process "in addition to the resources we already have in the area on the ground."

The strongest of the tornadoes that struck late Feb. 18 and early Feb. 19 are said to have had winds of more than 160 mph. National Weather Service survey teams reported more than 100 homes damaged and dozens destroyed. In Newton County, extensive damage, almost solely the result of downed trees, affected 20 to 30 homes.

Last year was a record year for insured losses in Georgia. Tornadoes that swept through central Atlanta and parts of north Georgia March 14-15 last year were the costliest storm event in the state's history (BestWire, March 18, 2008). Oxendine said losses have reached $300 million. More tornadoes last May added more than $100 million in insured losses.

The number of tornadoes in the United States during the first quarter of 2008 surpassed the previous four-year average, but an even more troubling trend for the industry has emerged: Losses of $1 billion and higher from single events are becoming more frequent, approaching losses from hurricanes, according to an A.M. Best Co. special report published last year (BestWire, April 11, 2008). Tornadoes and related weather events have caused an average of 57% of all U.S. insured catastrophe losses in any given year since 1953. In 2007, losses from these perils generated 69% of total insured catastrophe losses, the report said.

The top five writers of homeowners multiperil insurance in Georgia, according to 2007 A.M. Best state/line product information based on direct premiums written, were: State Farm Group, with a 30.2% share; Allstate Insurance Group, 15%; Georgia Farm Bureau Group, 8.7%; Travelers Insurance Cos., 7.6%; and USAA Group, 5.6%.

The top five writers of private-passenger automobile insurance in Georgia, according to 2006 A.M. Best state/line product information based on direct premiums written, were: State Farm Group, with 22.4%; Allstate Insurance Group, 12.8%; Progressive Insurance Group, 12.1%; Berkshire Hathaway Insurance Group, 7.2% and Georgia Farm Bureau Group, 5.7%.

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)

February 25, 2009

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