Recent Tornadoes May Be Costliest Ever

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 United States from May 2 to 11 have the potential to be the costliest in history, the New York-based Insurance Information Institute said.

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

AIR Worldwide, a Boston, Mass.-based subsidiary of Insurance Services Office in Jersey City, N.J., used catastrophe computer modeling 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 the most since the National Oceanic and Atmospheric Administration started keeping records in 1950.

"While the industry has the capacity to pay these claims, these latest storms substantiate what the industry has been seeing for years," said Robert Hartwig, Ph.D., I.I.I.'s senior vice president and chief economist.

"Homeowners insurance rates in many parts of the country continue to rise because of the extraordinary costs associated with paying these claims," said Mr. Hartwig.