Natural Disasters and Terror Plots: What Home Insurance Covers
Last week, insurance companies acted quickly to send extra adjusters and mobile units into states where tornadoes touched down, and tens of thousands of homeowners have filed claims. State Farm reported that it has received nearly 24,000 housing and commercial related claims in Tennessee, Alabama, Georgia and Mississippi, as well as nearly 20,000 auto claims in Tennessee and Alabama. Total insured losses from the tornadoes last week are expected to be more than $2 billion -- a high figure for tornado damage but still low compared to damage from hurricanes and earthquakes.
"The industry remains capable and prepared logistically and financially to handle these losses," said Robert Hartwig, president of the Insurance Information Institute.
The cost to rebuild Tuscaloosa, Ala., alone, parts of which were completely leveled, is expected to be between $40 million and $45 million, said Steve Wells, president of the Alabama Municipal Insurance Corporation, a not-for-profit company that provides coverage for the state's municipalities. Wells said he expects more cities and towns -- many of which have been utterly demolished -- to contact the insurance company in the coming week as they get valuation on the damage incurred. The corporation sent $1 million to Tuscaloosa on Tuesday to start repairs to city infrastructure, although significant rebuilding efforts may take weeks or months to get started, Wells said.
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