In the aftermath of Hurricane Isabel, as property & casualty insurance adjusters move into affected areas of the U.S. to assess damage, payouts could reach as high as US$1 billion, says the Insurance Information Institute (III). Hurricane Isabel cut a swath along the coast of North Carolina and Virginia, with other states as far north as Pennsylvania and New York experiencing damage from flooding. The storm is also being blamed for at least 36 deaths, and as of Monday, more than a million people were still without power. “Thankfully, Hurricane Isabel as a Category 2 storm did not approach the level of damage of Hurricane Floyd, which hit the same general area in 1999,” says Bob Hartwig, chief economist of the III. “While formidable, Isabel will fall generally within the range of catastrophic risk that insurers anticipated and built into insurance premiums for homeowners and businesses along the East coast. I would not expect the storm by itself to have a significant effect on insurance rates.” Hurricane Floyd caused about US$2 billion in insured damage, almost double that of Isabel, and 1992’s Hurricane Andrew remains the largest hurricane loss in the country’s history at US$20 billion. Nonetheless, the III notes that coming on the back of other tornado and storm damage this year, Isabel is helping to make 2003 a relatively bad year for catastrophe losses. Through August 2003, catastrophe losses had hit US$7.6 billion for insurers south of the border, versus US$5.9 billion in all of 2002. The III notes that the kind of billion-dollar events such as Isabel are becoming more and more frequent, and this is having an impact on the cost of homeowners’ insurance. Since 1990, U.S. insurers have paid out US$1.17 in claims for every US$1 in premium collected on homeowners’ policies. In Canada, south-central Ontario experienced close to 30 mm of rain on Friday, with power cut to about 30,000 homes, but no major flooding was reported.