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Earl Spares Insurers for the Most Part

Source: WSJ

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Posted on 07 Sep 2010

Last week Hurricane Earl was shaping up to cause significant havoc on the East Coast, but in the end it managed to avoid the mid-Atlantic for the most part and basically petered out before it reached Massachusetts. Not only was this great news for the people in the region but also for Property/Casualty insurers who were anticipating a costly storm.

As the storm was making its way up the coast, insurers had begun organizing a team of claims representatives and deploying mobile response units. Yet State Farm Mutual Automobile Insurance Co. still had its mobile claims center in Charlottesville, VA on standby on Saturday, instead of deployed along the coast, waiting on damage reports that appear unlikely to materialize. Allstate Corp.'s mobile unit was in waiting mode in Raleigh, N.C.

Farmers Insurance, a unit of Zurich Financial moved its claims bus from its Raleigh staging area to the parking lot of a Wal-Mart in Virginia Beach, Va., after the storm passed by off the coast Friday morning. But the 15 claims adjusters it had on hand didn't have any claims to process, said Riko Metzroth, a vice president and Virginia state executive director for the company.

State Farm, the largest home and auto insurer in the U.S., had heard from six customers in the mid-Atlantic region with vehicles damaged by the storm, and three people with homeowners claims. In New England, State Farm had so far recorded two claims, said Jeff McCollum, a spokesman.

Those figures didn't include any from North Carolina's Outer Banks, and McCollum said that homeowners with vacation properties could take a few days to return to the barrier islands to check on their homes and, if needed, file claims.

Hurricane Earl at one point seemed like it could have struck the North Carolina coast and maintained its hurricane strength long enough to inflict damage to the Hamptons in New York and Cape Cod in Massachusetts. Forecasters had warned the entire East Coast to be on guard in case the storm shifted westward.

Instead, it shifted east as it approached North Carolina, and lost strength before it passed off the coast of Massachusetts. A monitoring station in Nantucket, Mass., reported peak gusts of 54 miles an hour, according to Risk Management Solutions, a disaster-modeling firm. A storm must have sustained gusts of 74 miles an hour to be considered a category one hurricane.

The remnants of Hurricane Earl crossed Nova Scotia as a tropical storm Saturday.

RMS, which typically estimates the insured losses of such storms, said on its website that the uneventful nature of the storm meant it wouldn't be providing a damage estimate. Forecasters have said that a variety of factors, including extremely high water temperatures in the Atlantic and Gulf of Mexico, have indicated for months that this year's hurricane season would be extraordinarily eventful. But the season, which typically hits its peak in the first half of September, has so far failed to live up to the dire warnings.


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