The insurance industry is “financially prepared to pay the claims that may arise out of significant natural disasters in 2013 and beyond,” said Dr. Robert Hartwig, president of the Insurance Information Institute, looking ahead at a predicted active hurricane season.
The industry’s claims-paying capital was at a record $608 billion at the start of the second quarter of 2013, driven by premium growth, a reduction in catastrophe losses despite ongoing claims from Superstorm Sandy, and favorable prior-year reserve development. Direct insured catastrophe losses during the first quarter were $3.6 billion, among the costliest on record, but fell by $1 billion in the current period.
“The growth in the industry’s capital base occurred despite the fact that insurers paid out nearly $70 billion in catastrophe-caused claims over the prior two years,” says Hartwig in an I.I.I. statement. “The fact that the industry was able to meet its financial obligations after Sandy, and enter 2013 in such a strong financial position, is continued evidence of the property/casualty insurance industry’s remarkable resilience in the face of extreme adversity.”
Wind damage from tropical storms and hurricanes is covered under standard homeowners, renters and business insurance policies, the I.I.I. says. Flood damage resulting from storm surge caused by hurricanes is excluded under standard property insurance policies. However, it is available from the government’s National Flood Insurance Program and some private insurers.
Optional comprehensive auto insurance policies may cover losses due to wind damage, flooding and falling objects such as tree limbs.