This year’s third quarter U.S. property/casualty insurance losses are expected to drop 98 percent from last year’s record amount of $48 billion, according to the Insurance Services Office (ISO).

Carriers are expected to pay homeowners and businesses an estimated $971 million for third-quarter property losses resulting from a total of seven catastrophes in 20 states — the third lowest record among third quarters in the past 10 years, said ISO’s Property Claim Services (PCS) unit yesterday. PCS estimates the seven catastrophes of third-quarter 2006 generated nearly 280,000 claims.

According to an ISO release, the costliest event of the period was an outbreak of severe weather across the upper Midwest that caused $280 million of insured property damage in four states. The second costliest event — and the only tropical cyclone — was Tropical Storm Ernesto, which caused an estimated $245 million in insured property damage.

At $200 million, losses in Minnesota topped the list of the five most severely affected states, followed by Missouri at $113 million, Illinois at $112 million, New York at $76 million, and New Jersey at $70 million, PCS said.

PCS estimates represent anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total insurance payment for personal and commercial property lines of business covering fixed property, personal property, vehicles, boats, related property items, business interruption, and additional living expenses. The estimates exclude loss adjustment expenses.

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