Claims News Service, Jan.10, 10:10 a.m. EST -- The record total of homeowners' insurance claims payments resulting from the 2005 hurricanes in Mississippi is enough to wipe out all homeowners' premiums paid in the state during the past 17 years, according to the Insurance Information Institute.

The magnitude of the loss will force a fundamental reassessment of risk in the state by insurance companies, according to the Institute, which could make homeowners' insurance more costly and less available in Mississippi.

Homeowners' insurers in Mississippi are expected to pay $5.5 billion in claims from Hurricanes Katrina and Rita, an amount equal to all homeowners' insurance premiums paid in the state since 1989 and nearly nine times the estimated $625 million in homeowners' premiums paid last year.

Insurers will pay an estimated $5.5 billion on 355,000 claims to homeowners in Mississippi from Hurricane Katrina and $20 million on 5,000 homeowners' claims from Hurricane Rita, according to ISO.

Overall insured catastrophe losses in 2005 exceeded $55 billion, a new record. The majority of those losses occurred in Louisiana and Mississippi. Hurricanes Katrina, Rita, Wilma and Dennis resulted in a total of approximately three million claims.

"After mega-catastrophes such as Hurricane Katrina, insurers and reinsurers will reassess the risk associated with writing homeowners insurance in Mississippi," said Dr. Robert Hartwig, chief economist of the I.I.I. "This reassessment will be a multi-year process."

The Insurance Information Institute is a nonprofit, communications organization supported by the property/casualty insurance business. More information is available at www.iii.org.

Special Reports /

Mississippi Claim Payments Equal 17 Years of Premiums

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