View this article online: https://www.insurancejournal.com/news/west/2011/07/28/208351.htm
The natural gas shortage and record freezing temperatures that slammed New Mexico in February cost insurance companies $55 million in claims.
A memo from the state Public Regulation Commission’s Insurance Division says homeowners received the most help, representing 7,422 of the nearly 8,900 claims that were paid and almost $45 million of the total insurance payout.
The Santa Fe New Mexican reported Tuesday that more than $10 million went to pay off 1,352 commercial or business claims, while less than $200,000 went to 87 automobile claims.
All told, 9,600 insurance claims were submitted, 273 were denied and 474 resulted in no insurance company payouts.
The extreme winter weather left an estimated 32,000 homes and businesses in New Mexico without natural gas for several days.
While it’s difficult to place an exact cost on the damage from the natural gas outage and the freeze, the state memo offers a partial accounting thanks to 159 licensed insurance companies that reported data to the Insurance Division.
“That’s quite a bit of settlement,” Rep. James Strickler, R-Farmington, said Monday of the $55 million payout during the inaugural meeting of the Natural Gas Emergency Investigation Legislative Task Force.
The average homeowner claim was about $6,000, compared with the $7,500 that commercial claims averaged. The average automobile claim was $2,200.
The memo makes clear that the number of claims and insurance money paid out don’t reflect the full extent of the damage inflicted on New Mexico.
Not accounted for are the dollars that individuals and businesses spent on deductibles to trigger their insurance policies. The figures also don’t include uninsured property damage or city or county infrastructure, such as municipal water systems whose frozen pipes burst as they thawed.
In seeking federal aid earlier this year, the state estimated $4.6 million in damages to uninsured entities and public infrastructure, state Homeland Security Secretary Michael Duvall said Monday.
That cost might rise. The state added three pueblos to the list of recipients for federal help after the initial request was made, Duvall said.
The Federal Emergency Management Agency will pay 75 percent of that total cost, with the state and local governments splitting the remaining 25 percent, Duvall said.