NEW YORK, Dec. 6, 1999 – Insurers are expected to pay $1.8 billion to Hurricane Floyd victims, according to revised estimates of insured property losses by Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.
The revised estimate, following a resurvey of insurers, is up $500 million, or nearly 36 percent, from PCS' original estimate of $1.3 billion in September. The resurvey shows the number of claims filed by homeowners and businesses was 526,550, up 4.5 percent from the preliminary estimate of 503,700.
ISO's PCS unit resurveys catastrophe losses about 60 days after issuing preliminary estimates if losses exceed $250 million or specific circumstances relating to a catastrophe require additional analysis. In the case of Hurricane Floyd, PCS resurveyed insurers because extensive flooding and slow receding of floodwaters prevented a comprehensive appraisal of insured property damage.
The increase in the estimate of insured property damage primarily stemmed from higher losses in North Carolina, estimated at $1.25 billion, up from the preliminary estimate of $825 million in September.
Insured property losses in Pennsylvania and New Jersey were also revised upwards. PCS' estimate for Pennsylvania losses increased to $63 million from $40 million, while the estimate of New Jersey's losses climbed to $95 million from the initial $84 million estimate.
Insured property losses also rose in South Carolina, Maryland, and Georgia. The new totals are as follows: South Carolina $60 million, up $10 million; Maryland $45 million, up $5 million; and Georgia $15 million, up $1 million.
Hurricane Floyd rampaged through 16 states, from Florida to Maine, over a four-day period (September 14-17).
The federal government covers flood losses through its National Flood Insurance Program. Flood, crop, and livestock losses are not included in PCS' estimates.
ISO's PCS unit defines a catastrophe as an event within a particular territory that causes $25 million or more in insured property losses and affects a significant number of property and casualty policyholders and insurers.
PCS estimates represent anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, and business-interruption losses. The estimates exclude loss-adjustment expenses.