The Joplin Globe, Joplin, MO

August 30, 2011

Insurance companies have paid $2.2 billion so far in Joplin

By Wally Kennedy
news@joplinglobe.com

JOPLIN, Mo. — The payments by insurance companies for covered tornado losses in Joplin have exceeded $2 billion.

Property Claims Services, the company that puts the insurance-payout numbers to a catastrophe, said it expects insured losses in Joplin to top $2.2 billion.

“That’s what insurers, as of the end of July, had paid and what they expect to pay,” said Robert Hartwig, spokesman for the Insurance Information Institute, in a telephone interview Tuesday.

“That’s actual dollars disbursed, plus the dollars insurers have earmarked or put in reserve for Joplin claims. We do not expect the number to go much higher than that.”

PAYOUTS SO FAR

The Missouri Department of Insurance, as of July 15, had received 16,656 claims for insurance coverage related to policies for homeowners, private auto, commercial property, commercial auto and other categories. The department said insurance companies had made payments of $745.3 million toward those claims, but that nearly 1,300 claims had not been resolved.

Of the $745.3 million, more than $404 million was to homeowners who had filed 7,600 claims. The total projected claims in the homeowners’ category is 8,285. More than $289 million was paid for 1,902 claims related to commercial property. The total claims expected in that category is 2,049.

John Huff, director of the department, said in a prepared statement, “The insurance industry’s role in Joplin’s recovery continues to be commendable, paying claims to what will be the largest insurance event in Missouri history.”

The payout of $745 million in eight weeks is a “significant investment into the local economy,’’ Huff said.

That money is fueling the reconstruction of Joplin. The city in July issued 1,570 permits for residential and commercial work with a total value of $51.7 million. That follows June’s permits with a total value of $27.2 million.

In just those two months, Joplin exceeded the $60.4 million value of all permits issued in fiscal year 2010 by nearly $18.5 million. The city’s fiscal year runs from Nov. 1 through Oct. 31.

About 60 permits were issued in July for new home construction. That compares with only 16 homes started in the previous six months, with a combined value of $2.1 million.



CONSUMER HOT LINE

At this point, the insurance claims that are still open may be some of the more difficult ones to resolve, Huff said. He encouraged consumers who need assistance with personal or commercial claims to contact the Department of Insurance through its consumer hot line at 800-726-7390.

Department employees continue to be available at Missouri’s Resource, Recovery and Rebuilding Center at 705 S. Illinois Ave.

It is difficult to quantify how many households and to what extent they lack insurance or lack sufficient insurance to cover their losses. Of the 10,691 people who requested assistance from the Federal Emergency Management Agency after May 22, 8,816 said they did not have insurance or did not have adequate insurance to cover their losses.



INSURANCE PREVALENCE

Hartwig said he thinks a large percentage of homeowners in Joplin have insurance coverage, and that a large percentage have policies that automatically increase on an annual basis to reflect increases in local construction costs.

“As for the uninsured, I think virtually every homeowner is insured via their mortgage,” he said. “A bank requires homeowners insurance. I think recent surveys have shown that up to 96 percent of homeowners have insurance. If there are those without insurance, it’s a small proportion. The same would be true for commercial property.

“The final amount for insured losses will drift slightly upward beyond the $2.2 billion, but not much more at this point.”

The number does not include those who might be self-insured.

Within days of the tornado, Eqecat Inc., a company that specializes in catastrophe risk modeling, estimated that insured losses in Joplin could range from $1 billion to $3 billion.

The payout will eclipse the $800 million paid in connection with a hailstorm in 2000 at St. Louis.