Canadian Underwriter

Tornadoes in Oklahoma caused $2 billion in insured claims payouts last May

February 11, 2014   by Canadian Underwriter

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Tornadoes that hit Oklahoma last May contributed to the state seeing the highest costs for natural disaster-related insurance payouts in 2013, the Insurance Information Institute said Tuesday.

“Oklahoma’s policyholders received nearly $2 billion from their insurers in 2013 after multiple, deadly tornadoes struck Oklahoma, changing forever communities such as Moore,” Dr. Robert Hartwig, president of the I.I.I. and an economist, said in remarks today to the National Tornado Summit in Oklahoma City.

Outside of that state, insured natural disaster-caused insurance claims payouts in 2013 were highest in Texas ($1.51 billion), Colorado ($907 million), Minnesota ($845 million) and Nebraska ($773 million), according to the institute.

Total natural disaster-caused insurance claims payouts in the United States came to $12.79 billion in 2013, with $10.27 billion attributable to tornadoes and severe thunderstorms. The rest of the losses came from events such as winter storms and wildfires.

For the period of 2000-2013, Oklahoma cumulatively reached $9.8 billion for insured claims payouts from tornado, thunderstorm and/or hail catastrophes, behind Texas, which had $16.9 billion for the same period, the institute said.

“Since 2000, insurers have paid $135 billion on millions of claims in all 50 states from severe convective events including tornadoes,” the organization noted.

“Hurricanes like 2012’s Sandy generate headlines, even though it is the frequency and severity of tornadoes that has grown in recent years, reaching its peak in 2011, when some of the deadliest and costliest tornadoes in U.S. history swept through cities such as Tuscaloosa, Alabama, and Joplin, Missouri,” Hartwig stated. Alabama and Missouri policyholders received more than $3 billion from their insurers in 2011.

An analysis by the institute of U.S. natural disasters dating to 1983 found that, in any given year, 36% of all natural disaster-caused claims payouts arose because of tornadoes, according to Hartwig.

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