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Letter to the Editor
Tuesday August 17
Insured Losses from Hurricane Charley Estimated at $10 to $14 Billion
Insured losses from Hurricane Charley could total as much as $10 billion to $14 billion, according to industry estimates released Monday as insurers fielded thousands of claims from hard-hit Florida residents.Insurance companies face losses in the hundreds of millions of dollars from Hurricane Charley, which killed at least 19 people and left 25 counties declared federal disaster areas.
The multibillion-dollar Hurricane Catastrophe Fund, established by the state of Florida after Hurricane Andrew battered the region in 1992, is expected to cushion the blow and avoid a replay of Hurricane Andrew's aftermath that drained insurers' cash reserves, raised premiums sharply, and drove some insurance companies out of the Florida market or out of business altogether.
State Farm Insurance and Allstate, the nation's biggest personal-lines insurers, are the two leading providers of homeowners insurance in the worst-hit area of Charlotte County.
State Farm anticipates its losses will be limited to no more than $200 million because of Florida's hurricane fund and reinsurance contracts. State Farm, Florida's largest home insurer, has about 23 percent of the residential market in hardest-hit Charlotte County. The company had received 35,047 homeowners' claims and 4,250 auto claims as of Monday afternoon.
Allstate expects to pay the first $289 million of catastrophic losses in Florida, with the hurricane fund covering 90 percent of losses above that total.
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