You are here:HomeNews CenterInsurance News2004III: Losses From Hurricane Charley Expected to Reach $7.4 Billion

III: Losses From Hurricane Charley Expected to Reach $7.4 Billion

Insurers are likely to pay out an estimated $7.4 billion to help people whose homes, businesses and personal possessions were damaged by Hurricane Charley, according...
August 24, 2004

Insurers are likely to pay out an estimated $7.4 billion to help people whose homes, businesses and personal possessions were damaged by Hurricane Charley, according to the Insurance Information Institute (I.I.I.). The storm, which swept across Florida and into the Carolinas, ranks as the second most costly in U.S. history surpassed only by Hurricane Andrew which caused $15.5 billion in insured losses in 1992. Overall economic losses are always higher than insured losses. Economic losses not part of the insured loss estimate include, for example, lost wages and revenues, tax receipts, additional government outlays for disaster relief and damage to property that was uninsured. The I.I.I. estimate does not include crop or flood losses, which are insured under government programs.

It is still too early to estimate crop losses in Florida. Agriculture is second only to tourism as the state's largest industry. The Florida Department of Agriculture says 44,000 farmers grow more than 280 crops on a commercial scale in the state, with the citrus industry alone employing 90,000 people. A spokesperson for Florida Commissioner of Agriculture Charles H. Bronson said it would be a matter of days before a good assessment could be made in each of the citrus-growing counties to itemize the damages but at this point the commissioner believes agriculture damages will reach hundreds of millions of dollars.

As we are still less than two weeks out from Hurricane Charley's destructive trek through Florida, estimates of the ultimate cost continue to be fluid. In contrast to the I.I.I., Munich Re, the world's largest reinsurer, estimated the total value of damage caused by Charley at about $20 billion and put total losses covered by insurance at between $7 billion and $14 billion.

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