Midwestern states top 2006 list for largest catastrophe losses
While most of the country tends to consider the coastal areas to be the jackpot winners for pending catastrophes, in 2006 the Midwest won in the disaster lottery. Living in the Midwest, all of us know the devastating impact of tornadoes, floods, ice, snow, wind and hail storms. With the absence of the hurricanes in 2005, it isn’t that surprising that Indiana took the number one spot for having the greatest loss numbers in 2006.
According to the Insurance Services Office’s Property Claim Service (PCS) unit, the states where insurers reported the largest catastrophe losses included Indiana, Missouri, Tennessee and Kansas.
Just to broaden the scenario a bit, most recently damage from the late-December snowstorm that blanketed western Kansas with snow and ice, downing power lines and killing thousands of head of cattle, will exceed $360 million — and that doesn’t include homeowner or business losses covered by insurers which would not be eligible for federal aid.
But insurers were hard hit. PCS identified 33 catastrophe events in 2006. Together these events cost insurers an estimated $8.8 billion.
The 33 events caused insured property damage in 34 of the 50 states and the District of Columbia. Following are the states with the largest losses: Indiana $1.5 billion; Missouri $878 million; Tennessee $873 million; Texas $688 million and Kansas $601 million.
The catastrophe losses in these five states represent half of the total catastrophe losses in the United States for the year, according to PCS.
Sharp decline in 2006
The report also noted that the losses from catastrophe events declined sharply in 2006 but were nonetheless at their sixth highest level since 1997. The frequency of catastrophe events rose last year to its second highest level in a decade. PCS estimates that insurers received 2,272,000 claims for damage to personal and commercial properties and vehicles. Personal lines claims accounted for 58 percent of the total, while commercial lines claims were at 9 percent and vehicle claims at 33 percent.
The 2006 hurricane season produced only one storm of catastrophe proportions, Tropical Storm Ernesto, which caused close to $250 million in insured property damage.
It is true that Indiana as the top dog in losses for 2006 pales in comparison to the numbers for losses due to Hurricane Katrina in 2005: Louisiana $27.2 billion andMississippi $12.2 billion. However, Indiana’s lead in 2006 just supports the point that coastal regions aren’t always the areas with the most devastation and claims losses, but after Katrina and Andrew, it isn’t a fact that’s easily remembered.