An industry group said insurance adjusters still have not been able to get into the areas worst hit by Hurricane Katrina, but insurers hope to have firmer loss estimates by the middle of next week.
The Property Casualty Insurers Association of America (PCI), based in Des Plaines, Ill., said claims adjusters have still been denied access into the worst hit areas–the cities of New Orleans, Biloxi, Miss., and Mobile, Ala. But insurers are hopeful they can begin to get into the worst hit areas soon to produce firmer estimates of claim numbers and costs by Sept. 7.
Dick Luedke, a spokesman for State Farm, based in Bloomington, Ill., said the company has processed 50,000 claims and has 2,600 claims specialists in the field. He said representatives have been in Florida since Katrina first struck the Southern portion of the state last Thursday, and have been in Louisiana, Mississippi, and Alabama for the past few days working on claims.
While the company has been overcoming "hurdles" caused by the lack of power and fuel, satellite technology has helped facilitate claims.
The company has 30 percent or more of the homeowners property market in the three affected Gulf states, making it the top insurer there, and also is the top writer of auto insurance there.
St. Paul Travelers, the top writer of commercial property insurance in Alabama and Louisiana, and with the second largest share in Mississippi, has 100 catastrophe teams in the three states, said Jennifer Witloski, a company spokeswoman. St. Paul Travelers' mobile headquarters is researching claimants' policies and issuing checks for living expenses. An additional 500 claims representatives are on call if needed, she said.
She observed, as have others, that claims representatives have had to work on the outer fringes of the damage and are working their way toward the worst hit areas.
Contacting customers has been a particular challenge, she noted, and the company is advertising on radio and in newspapers to alert customers of permanent claims locations the company has set-up. She said while electricity is out, many victims still have access to radio broadcasts, and newspapers are being distributed throughout shelters. Some have wireless computer access and are able to view newspapers online.
The company, she added, has made a $1 million donation to the Red Cross, as have a number of other carries.
Moody's Investors Services issued a report today that said insurers have enormous challenges facing them in their loss estimation process because of delays in getting to disaster areas. Because of issues sure to arise over losses from wind or flood damage, the result would be a slowdown in the claims process. It also expects a high number of auto claims and other complicating factors.
Insures are also helping customers with their policies on renewals and payments. The Hartford said it would continue to insure homes in the hardest hit areas for customers unable to make their insurance payments. Although premium bills will continue to be issued, policy non-payment cancellation will be temporally suspended. The policy also extends to automobile and commercial insurance customers.
Fireman's Fund said it has declared a moratorium on cancellations and non-renewals of personal and commercial policies.
The cost of the disaster is having a heavy impact on the economy, said Risk Management Services, which said the economic loss to the U.S. economy would exceed $100 billion. It has kept its insurance loss estimate at up to $25 billion.
A.M. Best Co., the insurance rating service, weighed in saying it expected all rated companies would be able to meet their loss commitments, despite the magnitude of the loss. It added that it expects reinsurers to be heavily affected, but able to absorb the losses.
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