Hurricane insured losses to set mark

MIAMI — The four hurricanes that hit Florida this season combined to beat the record set by Hurricane Andrew for insured losses in what may be the nation’s costliest hurricane season ever, officials said Tuesday.

More than one in every five Florida homes has been damaged. The number of insurance claims this season is expected to hit 2 million, far surpassing the 700,000 claims filed after Andrew 12 years ago.

Insured damage is approaching the $22 billion record, in today’s dollars, set in 1992 by Andrew and Hurricane Iniki in Hawaii for the most expensive U.S. hurricane season on record, according to the Insurance Information Institute, and Standard & Poor’s Ratings Services.

All of these developments raised the specter of higher rates.

Bob Hartwig, chief economist for the Insurance Information Institute, estimates the four storms cost $21.7 billion. Standard & Poor’s credit analyst Thomas Upton put the loss Tuesday “in the low $20 billions.”

Those estimates beat the $20 billion inflation-adjusted toll from Andrew, the world’s costliest natural disaster at the time at $15.5 billion in 1992.

Assessments of Jeanne’s dash up the state Sunday and Monday are still under way.

“There’s going to be pressure on rates in Florida,” Hartwig said. “The industry’s resources need to be bolstered.”

Not so quick, said Tom Gallagher, the state’s top insurance regulator, who served as Florida’s insurance commissioner during Andrew and now is the state’s chief financial officer.

“Storms themselves are not justification for rate increases,” he said. “Rates gone up just for rates’ sake because of storms? That is not going to happen.”

The damage figures don’t include losses covered by the federal flood insurance program, and Gallagher expects Jeanne’s flood losses to be sizable. Hartwig suspects flood losses from the four storms will cost several billion dollars.

Some consumers are confused and frustrated with the insurance process so far. Some people with claims from Frances had not seen an adjuster before Jeanne compounded their losses.