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Tornado losses top $500M
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May 5, 1999: 2:49 p.m. ET
Insurance group warns tally could rise after deadly storms in Oklahoma, Kansas
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NEW YORK (CNNfn) - Insurers could take a half-billion dollar hit from the twisters that ripped through Oklahoma and Kansas this week, an insurance group said Wednesday.
The storms, which started Monday west of Oklahoma City and tore through to Wichita, Kan., destroyed more than 2,000 homes and damaged 8,000 others.
The losses are concentrated around Oklahoma City, where the median sale price of a home is $77,000, according to the Insurance Information Institute, a New York-based trade association. These are initial estimates and the insurance losses could move higher, the III warned.
A man hugs his sister-in-law amid the rubble of a home in Bridge Creek, Okla.
Last year was a record year for tornadoes in the United States, with 1,389 touching down, the III said. So far there have been 450 in 1999, resulting in 82 deaths, more than half of them from these storms. These latest storms spawned more than a dozen tornadoes.
The biggest insurance disaster was Hurricane Andrew in 1992, at $15.5 billion. The second-largest was the Northridge earthquake in 1994 in California, at $12.5 billion. Hurricane Hugo in 1989 caused $4.2 billion in insured losses and ranks third. The III estimated this week's storms could rank in the top 20 for insurance claims.
State Farm Insurance, the biggest insurer in Oklahoma City, said it still hasn't had access to the worst hit areas, which are quarantined off. But it knows from aerial observation that losses are total in the worst hit areas. "The disaster is unbelievable, and indescribable," a State Farm spokesman said.
State Farm is anticipating 26,000 homeowner claims and 12,000 auto claims in Oklahoma City alone. "It's probably one of the worst disasters we've seen in the last 10 years," the spokesman, Bill Handy, said.
The insurer shipping in its "storm troopers," 200 reps from around the country who will handle claims from the devastation. It has set up offices in smaller Oklahoma towns also hit by the storm: Stillwater, Weatherford, Chickasha and Altus.
Handy said beside car and auto claims, the company expects food-spoilage and other related claims from rural areas, some of which have been told they won't get electricity for another six days.
"Unfortunately, I'm sure we'll have some death claims from life insurance," Handy said. The latest reports put the death toll at 44.
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