Posted on 22 Apr 2013 by Neilson
A fire and explosion April 17 at a fertilizer plant in a remote area of Texas caused widespread property damage as it leveled the plant and inflicted extensive damage to surrounding homes, an apartment complex, a school and other buildings.
Excluding the plant, located about 80 miles south of Dallas, insured losses are not expected to be large because of the town's size, which is home to about 2,500 people, said Mark Hanna, spokesman for the Insurance Council of Texas. Hanna stressed he wasn't downplaying the impact to the town.
"A fairly good-size hailstorm going through a metropolitan area is going to cause more insured losses than this," Hanna said. "But that's not to take away from the catastrophe, because this is a small town, but it was just devastated."
The explosion happened shortly before 8 p.m. at the West Fertilizer Co. following a fire, according to the Texas Division of Emergency Management. Damage was reported several blocks away from the plant. Several fatalities and many more injuries have been reported and there is an ongoing search and rescue operation, Texas authorities said.
Patti Kelly, a State Farm spokeswoman in Texas, said few claims have been reported because the company's claims adjusters have been sidelined while authorities continue their investigation and search. Because the area has been cordoned off, the company doesn't have a clear picture of all the types of claims it will be fielding, she said.
"The insurance industry has responded very rapidly and within 36 hours people have been contacted, have checks for additional living expenses in their hands and the assistance is there," Hanna said.
The nature of the explosion is likely to touch all areas of insurance, according to the Property Casualty Insurers Association of America. People injured by the incident will likely make health insurance claims, while those killed could have life insurance policies, said the PCI's Joe Woods, vice president of state government relations. Building owners may have property insurance to cover damage and loss of rental income. Business interruption policies could also be triggered, he said.
"Based on what we know at this point, there appears to be extensive property damage to homes, businesses and automobiles," he said.