Insurers awaiting deluge of claims

• By TED GRIGGS
• Advocate business writer
• Published: Sep 4, 2008 - UPDATED: 12:05 a.m.

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It’s still too early to tell how many thousands of Louisiana homes and businesses were destroyed or damaged by Hurricane Gustav, as insurance companies and property owners continue to assess the toll.

“So far we have received nearly 8,000 property claims,” State Farm spokeswoman Brooke R. Cluse said Wednesday. “The causes of loss include wind, hail, water and flood.”

State Farm is Louisiana’s largest property insurer, with more than 30 percent of the market.

It is followed by Allstate at about 20 percent of the market and Louisiana Citizens Property Insurance Corp. at about 10 percent.

Cluse said the number of State Farm claims is expected to rise in the coming days because many policyholders cannot get to their properties in Houma and the surrounding coastal areas.

It’s still too early to estimate the dollar amount of damages, Cluse said.

Hurricane modelers and risk analysis firms have estimated total damages at anywhere from $2 billion to $10 billion. Insurers paid $41 billion in claims after Hurricane Katrina, and that did not include $17 billion paid by the National Flood Insurance Program.

Allstate is receiving lots of claims through its mobile response team, its Web site and (800) 547-8776 storm number, but it’s too early to estimate the number of claims and the amount of damages from them, spokesman Michael Siemienas said.

So far, Louisiana Citizens Property Corp. policyholders have reported about 5,000 claims, Chief Executive Officer John Wortman said. 

“We have run several models, and at this time our best estimate is approximately 15,000 claims and estimated costs of $150 million,” Wortman said.

Citizens has $350 million in cash, Wortman said. The company’s reinsurance does not kick in until claims reach the $200 million mark.

After $200 million, the reinsurance covers 90 percent of the next $500 million in claims, he said.

The company does not have power at either its Metairie or Baton Rouge offices and is working out of its emergency location in the Bon Carré Business Center on Florida Boulevard.