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Katrina's Losses Will Far Exceed Last Year's Florida Hurricanes

Hurricane Katrina is the worst natural disaster the insurance industry has ever handled. This catastrophe exceeds last year's series of Florida hurricanes in scope, magnitude...
September 6, 2005

Hurricane Katrina is the worst natural disaster the insurance industry has ever handled. This catastrophe exceeds last year's series of Florida hurricanes in scope, magnitude and complexity.  Here's why:

The number of anticipated claims from Hurricane Katrina will exceed the previous record two million claims received from the Florida storms. Losses from Hurricane Katrina cover large portions of three states; claims from the Florida storms were largely confined to a single state.

Hurricane Katrina devastated the homes, businesses and infrastructure of the city of New Orleans; no major metropolitan area incurred significant damage from last year's hurricanes in Florida.
Much of the damage from Hurricane Katrina is the result of flooding, rather than wind.  The majority of losses in Florida last year were from wind damage.
 
Many of the same disruptions confronting the victims of Hurricane Katrina face insurance adjusters and agents - lack of power, phone service, housing and fuel shortages.  Some may be disaster victims themselves. The final tally of insured losses will be surpassed by total economic losses to the region - tourism losses; cost of repairs to roads, bridges, levees, and water and sewer systems; lost income of people whose place of employment has closed, etc.

Nevertheless, the insurance industry has the financial strength and human resources to pay the claims from Hurricane Katrina. We have done it before and we will do it again.

Thousands of insurance adjusters from around the country have begun adjusting claims in areas accessible to them.  Others are gathered at staging areas prepared to move into the most seriously damaged communities as soon as civil authorities allow. As it has following Hurricane Andrew, 9/11 and last year's hurricanes, the insurance industry will fulfill its commitment to its customers.

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