2011 Joplin tornado losses could reach $2 billion

2011 Joplin tornado losses could reach $2 billion

January 10th, 2013 in News

JOPLIN, Mo. (AP) - Insurance payouts related to the May 2011 tornado in Joplin are likely to reach $2 billion, increasing what is already the largest insurance event in Missouri's history, a state insurance regulator said.

As of Oct. 31, insurance companies had already paid $1.65 billion on 19,870 private and commercial claims from the tornado, which killed 161 people, injured hundreds of others and damaged or destroyed thousands of homes and businesses, The Joplin Globe reported (http://bit.ly/RHU2St ).

"We still think it will be in the $2 billion range," John M. Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration, said Wednesday.

Insurance companies have responded to 8,647 claims and paid out $535.7 million for residential claims. For private auto coverage, the companies paid $47.9 million on 6,982 claims. All figures are as of Oct. 31.

The state insurance department is no longer requiring monthly reports on the claims submitted and paid by the state's insurance companies, Huff said, but regulators are still monitoring.

"We lasered in on the personal lines to make sure individual consumers were being handled in a timely basis," Huff said. "That is wrapping up very nicely. For all practical purposes, that is done. If a property owner has an issue that needs to be addressed, they should contact our customer affairs division."

The insurance payouts helped fund a steady rebuilding of homes in Joplin and surrounding areas, said Crystal Harrington, director of the Home Builders Association of Southwest Missouri. She said charities and nonprofits are still building one house for every two built by professional developers.

Some people have been reluctant to rebuild because of uncertainty about the federal "fiscal cliff" negotiations and whether Joplin's tax increment financing district would be approved, she said, and a "significant number" of Joplin residents have moved into homes in nearby Webb City and Carl Junction.

"Our building boom will come in a year or so when Mercy Hospital Joplin is being finished. We believe a first-rate, high-tech hospital will bring with it a large influx of high-tech jobs to Joplin," she said.

Claims from commercial property owners will eventually push the total to $2 billion, Huff said.

"They take longer because commercial claims often involve complicated coverage issues and larger individual losses," he said. "We are monitoring those, and they are progressing well. The industry response has been commendable, and we are comfortable with where they are."

As of Oct. 31, the insurance companies have responded to 2,142 claims and paid losses of $986.8 million for commercial property. Other commercial losses, such as autos, have generated 622 claims and paid losses of $19.4 million.