Insurance payouts from deadly tornadoes could hit $5B

Storms across six states killed at least 88 last weekend

New York /
Dec.December 17, 2021 03:30 PM

Insurance payouts from deadly tornadoes could result in $5 billion of payouts after the storms devastated parts of six states. (Getty Images)

Insurance claims filed in the wake of the tornadoes that devastated parts of six states and claimed at least 88 lives last weekend could result in $5 billion in insurance payouts.

The potential payout number would make it one of the most costly tornado disasters ever, according to the Wall Street Journal. Aon PLC data reported by the outlet show the costliest tornado disaster to take place a decade ago, when storms hit Tuscaloosa, Alabama and caused $8.5 billion in 2020.

Standard auto- and home-insurance policies typically cover wind damage, unlike flooding. However, insurance companies sometimes look to limit exposure by charging special deductibles, the Journal reported. The deductibles in the six states affected by the tornadoes are less than those for coastal homes needing hurricane coverage.

By Thursday afternoon, State Farm had received upwards of 11,000 claims from the six affected states, according to the Journal. Kentucky led the way with almost 1,800 claims, while Tennessee had the second-most claims. USAA, meanwhile, had received almost 2,000 claims by early Thursday.

Arkansas, Illinois and Missouri were also affected by the storms.

“Some parts of town are still standing, but for the most part it is just total devastation,” Steve Jones, an agent for an insurance company in hard-hit Mayfield, Kentucky, told the Journal.

Mayfield is the small city in southwest Kentucky where about 110 people sheltered in a local candle-making factory, requiring dozens to be rescued after the storm touched down. According to the Courier Journal, at least eight were killed there.

While Fitch Ratings has raised the possible insurance losses to nearly $5 billion as a result of the storms, that still pales in comparison to other major storms in 2021, including February’s Winter Storm Uri, which had an insured cost of $15 billion, the Journal reported.

Hurricane Ida had an even more devastating economic impact this summer, costing insurers about $40 billion, according to Fitch.

[WSJ] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    NYC budget proposes restoring unstaffed voucher discrimination unit
    NYC budget proposes restoring unstaffed voucher discrimination unit
    NYC budget proposes restoring unstaffed voucher discrimination unit
    Neil Patrick Harris and David Burtka in front of 2036 Fifth Avenue (Getty Images, Google Maps)
    Neil Patrick Harris sells Harlem brownstone in neighborhood record
    Neil Patrick Harris sells Harlem brownstone in neighborhood record
    Darien First Selectman Monica McNally and Great Island in Darien, Connecticut (Darien Republicans, Google Maps)
    Fairfield County town nears private island purchase for over $100M
    Fairfield County town nears private island purchase for over $100M
    From left: Oaktree Capital Management co-chairman Howard Mark; Helmut Lang; Hess CEO John Hess; and 8 Tyson Lane in East Hampton, Long Island (Getty Images, Oaktree Capital Management, Google Maps, Hess)
    Helmut Lang finally sells East Hampton estate
    Helmut Lang finally sells East Hampton estate
    A photo illustration of 6 South Oxford Street in Fort Greene (Compass)
    Townhouse set to smash Fort Greene price record
    Townhouse set to smash Fort Greene price record
    Mayor Eric Adams and Extell's Gary Barnett (Photos by Paul Dilakian)
    Real estate’s titans talk building, selling, and reinventing the city
    Real estate’s titans talk building, selling, and reinventing the city
    Ryan Serhant and Bess Freedman (iStock, Illustration by Kevin Cifuentes for The Real Deal)
    Ryan Serhant fires back at Bess Freedman, calls legacy brokerages “scared”
    Ryan Serhant fires back at Bess Freedman, calls legacy brokerages “scared”
    25 North Moore Street (Compass, iStock, Illustration by Kevin Cifuentes for The Real Deal)
    Manhattan luxury market slumps back toward normal
    Manhattan luxury market slumps back toward normal
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...