Recent Tornadoes May Be Costliest Ever

NU Online News Service, May 19, 4:01 p.m.EDT?The 412 tornadoes that swept across the central UnitedStates from May 2 to 11 have the potential to be the costliest inhistory, the New York-based Insurance Information Institutesaid.

The tornadoes affected 300 counties in 19 states and caused 40deaths, New York-based I.I.I. announced.

AIR Worldwide, a Boston, Mass.-based subsidiary of InsuranceServices Office in Jersey City, N.J., used catastrophe computermodeling to estimate the potential damage at $2.2 billion. So far,approximately $1.1 billion in claims have been filed.

The costliest tornado loss on record was an April 2001 event,when 16 states suffered $2.2 billion in insured damage.

This year's tornadoes during the first 10 days of May were themost since the National Oceanic and Atmospheric Administrationstarted keeping records in 1950.

"While the industry has the capacity to pay these claims, theselatest storms substantiate what the industry has been seeing foryears," said Robert Hartwig, Ph.D., I.I.I.'s senior vice presidentand chief economist.

"Homeowners insurance rates in many parts of the countrycontinue to rise because of the extraordinary costs associated withpaying these claims," said Mr. Hartwig.