Courtesy of the Insurance Information Institute
Hurricane Insurance Fact Sheet
Insurance companies have paid an estimated $40.6 billion on 1.7 million claims for damage to homes, businesses and vehicles in six states from Hurricane Katrina, the largest loss in the history of insurance. By contrast, Hurricane Andrew resulted in $15.5 billion in losses in 1992 ($20.9 billion in today’s dollars) and 790,000 claims.
The four hurricanes in 2005—Katrina, Rita, Wilma and Dennis—generated more than $57 billion in insured losses and 3.3 million claims. Some 15,000 adjusters from across the United States were involved in helping policyholders recover from these storms.
More than 95 percent of the 1.1 million homeowners insurance claims from Hurricane Katrina in Louisiana and Mississippi, totaling more than $15.5 billion, were settled within one year of the storm.
In Mississippi, more than 334,800 homeowners claims, totaling $5.2 billion, have been settled. In Louisiana, more than 658,700 homeowners claims, totaling $10.3 billion, have been settled.
Nearly all of the 305,000 claims from damaged vehicles, totaling $2 billion, have been settled in both states.
Despite the attention focused on lawsuits filed following this catastrophic storm, the number of claims in litigation accounts for a very small percentage of the total number of claims filed. Estimates show that fewer than 2 percent of homeowners claims in Mississippi and Louisiana were disputed either through mediation or litigation.
Insurers remain committed to ensuring that all claims resulting from Hurricane Katrina are settled fairly and completely.
A poll conducted by IPSOS Public Affairs in 2006 found that 89 percent of homeowners in Louisiana and 93 percent in Mississippi are satisfied with their insurance company. The survey reported that four in five people (82 percent in Louisiana and 80 percent in Mississippi) who filed a hurricane-related claim are satisfied with the way it was managed by their insurer. While satisfaction numbers are slightly higher inland, most residents in the hardest-hit coastal areas describe themselves as satisfied with the way their claim was handled.
While significant problems with rebuilding persist along the Gulf Coast—including severe damage to public infrastructure, a shortage of contractors and reduced population—the billions of dollars in claims paid to date are helping fuel an increase in residential building. Building permits have risen by 4 percent in Louisiana and 32 percent in Mississippi, compared with a 4 percent decline nationally during the same period.
Insurance company claims payments equal 11 percent of state income in Louisiana and 10 percent in Mississippi.
These are really some eye opening statistics. It’s extremely important that residents of the Gulf Coast make sure they retain the proper insurance levels necessary to secure their home and property in the event of a storm or hurricane. If you feel you are under-insured, contact an insurance agent immediately to bolster your “portfolio” to protect yourself from the ravages Gulf Coast, especially Louisiana and Texas residents, storms can cause. When you are insured, it is important to make sure your documents are in order and duplicates are stored in a safe place outside of your home (ex: bank, safety deposit box, family storage/location outside of the hurricane “zone,” etc.) For more tips on how to protect yourself from hurricanes or for general ‘how-to’ ideas, check our section on storm and hurricane tips.
(more…)