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Daily Real Estate News  |  May 24, 2011  |   Weather Disasters Cause Record Losses
Powerful tornadoes have ripped across the country this year, as well as floods and other natural disasters, which are causing insurance companies to face a record number in losses this year with billions of dollars in damages.

Insurers may post as much as $10 billion in weather-related losses this year--that’s about five times the amount it usually is, according to EQECAT Inc.

"This is not a black swan year that is an absolute worst case, but it is significant and it is close to that," Jose Miranda, director of client advocacy a EQECAT Inc., which provides disaster and risk models to insurance companies, told Reuters News.

A big portion of this year's spike has been caused by tornadoes. During the spring, tornadoes tore across Southeastern and Midwestern states. But experts are also predicting a higher Atlantic hurricane season this year too, which could send losses even higher.

Allstate Corp., the nation’s largest home insurer, says it projects April storms alone cost $1.4 billion and the company processed more than 100,000 claims.

Internationally, U.S. and overseas insurers face up to $55 billion in losses, which includes the major earthquakes this year in Japan and New Zealand.

The latest deadly tornado to strike in the U.S. was on Sunday in Joplin, Mo., which practically leveled a quarter of the city and has become the nation’s deadliest single tornado in nearly 60 years with 116 deaths so far. On Monday, the federal government offered additional assistance through the Federal Emergency Management Agency to home owners with uninsured expenses, such as home repairs, replacement of household items, or temporary housing needs.

Source: “U.S. Insurers Face Big Losses From Weather Disasters,” Reuters News (May 24, 2011) and “Federal Disaster Aid Available for Individuals, Public Entities Following Joplin, Mo., Tornado,” Associated Press Newswires (May 23, 2011)

Read more:
After Storms, Home Owners May Struggle to Rebuild

Foreclosed Homes Give Shelter to Tornado Victims

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