Hurricane Jeanne, which slammed into Florida over the weekend, may be the most expensive of four storms to hit the state this year, causing as much as $9 billion in damage.
Claims may run from $6 billion to $9 billion, rivaling Hurricane Charley as the most costly yet, according to estimates from Eqecat Inc., which uses computer models to estimate insured losses.
AIR Worldwide Corp., another modeler, forecast $5 billion to $9 billion, and a third, Risk Management Solutions Inc., projected $4 billion to $8 billion.
“These are big numbers that are starting to add up,” said Jay Fishman, chief executive of St. Paul Travelers Cos., the second-largest commercial insurer in the U.S.
Jeanne adds to an estimated $6.8 billion in claims from Charley, $4.4 billion from Frances, and $3 billion to $6 billion from Ivan.
Its wide path across the center of the state was similar to that of Frances, though Jeanne came ashore with stronger winds. Jeanne’s toll may be higher because some homes and buildings were already weakened.
“This one looks to be the worst that has struck Florida this year,” said Tom Larsen, senior vice president of Oakland-based Eqecat.
Bloomington, Ill.-based State Farm Mutual Automobile Insurance Co. and Northbrook-based Allstate Corp. are the two biggest home insurers in Florida by premiums.
Bob Hartwig, chief economist at the Insurance Information Institute, said Jeanne is not likely to top Charley’s losses. He declined to give an estimate.
Risk Management expects as much as $8 billion in insured damage from Jeanne because insurers may waive a second deductible for some policyholders that were hit by both Jeanne and Frances, said meteorologist Kyle Beatty.
“Many of the buildings haven’t been repaired or may have temporary repairs” after Frances, said Beatty, whose company is based in Newark, Calif. On the other hand, a building that was destroyed by Frances can’t be devastated twice, which may limit losses to about $4 billion, he said.
Insurers may end up reclassifying some claims to Jeanne from Frances, particularly if a home damaged in Frances was now destroyed, Eqecat’s Larsen said. This may push Jeanne damage estimates to the higher end of Eqecat’s range and lower Frances’ toll, he said.
Insurers have enough money and reinsurance to pay for Jeanne, said Anthony Diodato, an analyst at credit-rating firm A.M. Best Co. Insurers are better able to withstand losses than they were a decade ago because of a state catastrophe fund, rate increases, higher deductibles and more reinsurance put in place since Hurricane Andrew bankrupted almost a dozen insurers in 1992, Diodato said.
