The tornadoes that swept across the eastern United States this past weekend could cost insurers $290 million – making it one of the top five costliest tornado events, according to the Insurance Information Institute (I.I.I.).
The preliminary estimate is based on an I.I.I. survey of insurers and an average of initial estimates prepared by Boston-based AIR Worldwide. AIR, a wholly-owned subsidiary of Insurance Services Office, Inc. (ISO), uses a computer modeling program to estimate insured losses from catastrophes.
With winds as high as 200 mph, the tornadoes damaged homes as well as businesses and motor vehicles in 17 states including Alabama, Indiana, Kentucky, North Carolina, Ohio and Tennessee. Standard business, homeowners and auto policies will cover wind damage from the tornadoes, according to the I.I.I.
The largest tornado-related loss in U.S. history was in May, 1999, when tornadoes and storms struck 18 states including Kansas and Oklahoma, costing insurers nearly $1.6 billion (in 2001 dollars).
Prior to 1999, the largest tornado-related loss was in 1974, when a 17-state, multiple tornado, event including Xenia, Ohio, caused insured losses of more than $1.5 billion (in 2001 dollars).
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