Okla. Gov. Estimates Ice Storm Damage Will Exceed $200M
Winter storms are nothing new for Steve Kennedy in his work as a claims supervisor for Farmers Insurance. He’d never seen anything quite like this week’s deadly ice storm in Oklahoma.
“The front yard of this house looked like a war zone. With the amount of trees that had fallen, you could barely see the house. There was so much debris,” said Kennedy, who is based in California. “Typically you don’t see that amount of damage from these type of storms. It was just significant.”
While Kennedy and others were still working on their assessments, Gov. Brad Henry estimated Dec. 13 that damage from the storm would exceed $200 million.
Others were slower to guess at the extent of the damage. The state insurance commissioner’s office didn’t expect to have a monetary estimate of the damage caused by the storm for three to four weeks.
Insurance companies were processing thousands of claims in the aftermath of the storm, which has claimed at least 23 lives and at one point knocked out power to more than a half-million Oklahomans.
“We made an initial estimate of about 5,000 claims statewide … and it appears we were probably conservative,” State Farm spokesman John Wiscaver said.
State Farm had taken nearly 6,000 claims by late in the day on Dec. 13, Wiscaver said, and now expected to eventually reach 10,000 claims from this storm. Farmers Insurance, the state’s second-largest insurer behind State Farm, had received more than 5,500 claims, spokeswoman Michelle Levy said.
Chad Yearwood, a claims supervisor at American Farmers and Ranchers Mutual Insurance, said his company had received at least 600 claims and was projecting the average claim at $2,000.
At that rate, it would take 100,000 claims to reach Henry’s estimate.
By comparison, the most expensive winter storm to hit the United States in 2006 arrived in five Northeastern states last January and caused $125 million in insured losses, according to the Insurance Information Institute. Loretta Worters, the institute’s vice president of communications, said that storm came only days after another winter storm that created $105 million in insured losses.
A record-setting winter storm in March 1993 caused $1.7 billion in damage across 20 states, Worters said.
The insurance companies said most claims involved damage caused when trees weighted down by ice fell on homes or vehicles, or from perishable food items that went bad while the power was out.
“These big trees that you never dreamed would fall are coming down,” Yearwood said.
Businesses were feeling the impact too. State Treasurer Scott Meacham anticipated a drop in Christmas shopping for clothing and entertainment items, such as appliances, and possibly on new car sales.
“Consumers are concentrating on day-to-day living, first restoring power and then cleaning up debris,” Meacham said. “They really aren’t focused on going out and spending discretionary income.”
Ron Edgmon, president and CEO of the Oklahoma Grocers Association, said more than 40 of the state’s 800 independent grocery stores lost power for long enough that some food was in danger. Some goods were donated to food banks and other charities before it spoiled, while others went to waste.
“If it got ruined, then they threw it away,” Edgmon said. “It’s about all you can do.”
Edgmon said it’s still too early to know exactly what kind of losses the grocers suffered because of the storm but “this is by far the most widespread that I’ve ever seen.”
“It’s going to be substantial,” Edgmon said. “I wouldn’t put a number on it.”
While many items on store shelves can survive colder temperatures, some produce items are only safe for a couple days and items in the refrigerator and freezer cases get compromised even quicker.
“When those cases go down, they don’t last very long,” Edgmon said. “They’re not insulated like a freezer would be.”
A day after the governor said he didn’t anticipate this winter storm being any different from “natural disasters before that have impacted the state revenues and state budget very little,” Meacham had a new assessment.
“When it first started happening, I thought it would be a two- or three-day ice event and any impact would be minimal,” Meacham said. “But with a power outage lasting this long and the widespread damage we’re seeing to homes and businesses, it will have a definite impact.”
Meacham still maintained optimism that the state budget could rebound before the Christmas shopping season is over.
“Our hope is that people will pick up the slack when things return to normal,” Meacham said, “but we’ve got another storm coming in this weekend.”