Tornadoes that slammed five states in the U.S. Midwest and South last week may generate as much as $2 billion in claims costs for insurers, risk-modeling firm Eqecat Inc. says.
Tornadoes have killed 49 people in the United States this year, according to a statement issued Monday by Oakland, Calif.-based Eqecat. The tornadoes will probably bring claims of $1 billion to $2 billion, the firm said.
More than 150 tornadoes touched down from Feb. 28 through March 3, most of them in Tennessee, Kentucky, Indiana, Illinois and Alabama, Eqecat said. The U.S. has experienced 272 tornadoes this year through March 4, more than twice the seven-year average for the period, according to the statement.
“With basically a month’s worth of tornadoes last week, that doesn’t necessarily say that the rest of the year will be as bad as it has been so far,” said Jose Miranda, Eqecat’s director of client advocacy. Referring to conditions that increase the likelihood of tornadoes, he said, “You have to have all the ingredients come together.”
State Farm Mutual Automobile Insurance Co., the biggest U.S. home and car insurer, is among the top two providers of homeowners’ coverage by market share in Alabama, Kentucky and Indiana, according to data compiled by Bloomberg. The insurer received about 3,600 claims from the tornadoes for that line as of March 3, Holly Anderson, a spokeswoman, said in an e-mail.
“These are early numbers and we expect to know more early this week as our customers assess damage,” said Anderson.