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Losses Mount From Hurricane Charley, Could be Less Than 1992's Andrew

Late on Friday, Hurricane Charley cut a path of death and destruction across the state of Florida. At least 16 people lost their lives and...
August 17, 2004

Late on Friday, Hurricane Charley cut a path of death and destruction across the state of Florida. At least 16 people lost their lives and thousands lost their homes. The hurricane, which had been predicted to make landfall north of Tampa as a category 3 storm, instead changed course and intensified to a category 4 storm that entered the state near the southwest gulf coast city of Punta Gorda, passed through Orlando and then moved over Daytona Beach before heading into the Atlantic Ocean.

Two days after the storm slammed into the southwest Florida coast with winds of 145-mph, state officials issued a rough estimate of the damage to residential property, saying it could range between $5 billion and $11 billion. Florida officials are being quoted saying Hurricane Charley probably will not cause Floridians' insurance premiums to skyrocket like 1992's Andrew, and fewer insurers should go bankrupt from paying out damages expected to reach the billions of dollars.

It is important to note that early estimates of damage following a natural disaster of this magnitude are just that - early estimates that change as assessments of damage continue. Michael D. Brown, director of the Federal Emergency Management Agency, said it was too soon for a damage estimate. A spokesman for state Chief Financial Officer Tom Gallagher gave an estimate of $5 billion to $11 billion, based on the value of homes and insurance policies along the path Charley took across Florida.

By comparison, the estimated insured losses from Hurricane Andrew were $15.5 billion calculated in 1992 dollars, or $20.3 billion in calculated in 2003 dollars, according to the Insurance Information Institute (III).  

Thousands of people, many of them elderly retirees, have been left homeless, and many more are without water and power. The death toll is expected to go higher.

On Sunday, President Bush toured a heavily damaged area of Punta Gorda by motorcade. Accompanied by his brother Jeb Bush, the Republican governor of Florida, the president got out of his vehicle and visited people in a residential neighborhood. "It's going to take awhile to rebuild it, but the government's job is to help people rebuild their lives, and that's what's happening," Bush told reporters accompanying him. As a chain saw buzzed in the background, he said people he spoke with had voiced concerns about insurance payments, "and the state's organized to handle them, the insurance claims," Bush said. The Federal Emergency Management Agency has declared 25 counties eligible for federal disaster aid.

PIA National is working with PIA of Florida to identify what PIA members might be asked to do, as PIA of Florida reaches out to PIA members and all other insurance agencies affected by this event. We will keep PIA members and carriers apprised.

Charley Isn't Seen to Be Another Andrew (Associated Press, 8/15/04)

Insurers Set Up Toll-Free Numbers for Hurricane Charley Claims (Insurance Information Institute, 8/13/04)

Insurers Begin to Tally Charley Losses (Reuters 8/16/04)

Hurricane Charley Information Center (Insurance Information Institute)

PIA of Florida Resource Center

Insurers Say Andrew Prepared Them for Charley (Associated Press 8/15/04)

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