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Midwest and Mid-Atlantic Insurers Get Thousands of Claims from Derecho Storms

Source: BestWire

Posted on 10 Jul 2012 by Neilson

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Derecho Winds Insurer ClaimsInsurers in the Midwest and the mid-Atlantic regions have fielded thousands of claims after a line of severe derecho thunderstorms blew through, toppling trees and knocking out power.

The storms struck on June 29 and were partially fueled by extreme heat. The system developed June 28 in eastern Iowa and tracked east toward Virginia, RMS said in a written statement. The damage swept across at least 13 states, from Iowa in the West to New Jersey in the East and from Ohio in the North to the Carolinas in the South. Winds were gusting from 80 to 90 mph, according to RMS.

A derecho is a long-lived, violent straight-line convective wind storm that is not very common because of the specific atmospheric conditions needed for the storms to form, according to catastrophe-modeling firm RMS.

Amy Preddy, a State Farm spokeswoman in Virginia, said the storm was primarily a wind event, and the company has been getting lots of reports of felled trees. The storm was declared a catastrophe.

"Downed trees on structures, downed trees on vehicles, on power lines," Preddy said.

Leah Knapp, spokeswoman for Erie Insurance, said her company had heavy claims reporting the first weekend after the storms and last week. She said the company had lots of claims because of wind and some because of power outages. Erie does not publicly release claims information.

Preddy said State Farm's catastrophe area was in the states of Indiana, West Virginia, Maryland, Virginia, Ohio, Illinois, South Carolina, Kentucky, New Jersey and North Carolina. The company had combined claims of about 33,100 for property and 11,700 for automobile in those states as of July 9, she said. Property claims in West Virginia, Virginia and Maryland made up just under half of the total number, according to information from Preddy.

USAA Group reported 23,000 claims from the storms and Nationwide reported about 16,000 claims, according to company spokeswomen. Nationwide had the highest claims volume in Ohio and Virginia.

State Farm Mutual Automobile Insurance Co. and rated USAA companies currently have a Best's Financial Strength Rating of A++ (Superior). Erie Insurance Exchange and Nationwide Mutual Insurance Co. are currently rated A+ (Superior).