Frances delivers more commercial claims.

Hurricane Frances is expected to bring in more than the 135,000 commercial claims Hurricane Charley brought in, but the claims from Frances are expected to be at a smaller dollar value, according to the Property Casualty Insurers Association of America.

Hurricane Charley, which was a Category 4 hurricane that hit the west coast of Florida and swept across the state on Aug. 13, resulted in commercial insurance claims of $2.7 billion, or 40% of the estimated $6.8 billion in total damages for Charley, PCI said in a statement. About one in every five claims from Charley was a commercial claim.

As of early September, industry estimates of commercial claims and losses weren't yet available for Hurricane Frances, a Category 2 hurricane that slammed Florida's east coast over the Labor Day weekend. Although damage from Frances was less severe, it was wide and affected a large number of counties in Florida, particularly the areas of Fort Pierce and Orlando, said Roger Morris, a PCI vice president. Flooding throughout the state has made it hard for claims adjusters to reach affected areas and has slowed down recovery efforts, he said.

Although commercial policies don't cover business interruption as a result of power outages from a local utility company, insurers offer coverage specifically designed to cover the loss of stored contents if there's a power outage, said William Stander, Tallahassee-based regional manager for PCI.

Cynthia Michener, spokeswoman for the Hartford Insurance Group, said the company had tallied 3,500 claims arising from Frances through Sept. 7, although the company could not yet provide an estimate of insured loss. Although Hartford is the fourth-largest commercial insurer in the state, with $596 million of direct commercial premium written in 2003, the company said the bulk of its claims thus far have been on homeowners policies, with a smaller number arising from auto, and only a few commercial lines claims.

Highlights of BestWire hurricane coverage ...

MOLD: Insurers are protected from large mold losses in Florida. Virtually all insurers have mold exclusions, said Bob Lotane, a spokesman for the Florida Office of Insurance Regulation. Many companies were approved to cap mold coverage in their policies at a total of $10,000 per policy period. Mold is a new post-hurricane concern for insurers. State Farm didn't have any mold claims after Hurricane Andrew hit Florida in 1992, said Tom Hagerty, a spokesman for State Farm Florida Insurance Co.

PUBLIC ADJUSTERS: Florida's Chief Financial Officer Tom Gallagher issued an emergency rate-banning rule stopping public adjusters from requiring cash up front to adjust claims for victims of Hurricane Charley. He also limited public adjuster fees to 10% of the claim amount. There are 400 licensed public adjusters in Florida, according to the Department of Financial Services.

CONSTRUCTION CODES: After Hurricane Andrew hit Florida in 1992 the state adopted strict construction codes for homes. The homes built under the new codes may have lost clay tiles that caused damage to other homes, and their double doors may have failed, but very few had structural damage, said Timothy Reinhold, vice president of engineering for the Institute of Business and Homes Safety. Among total housing in Florida, only about 2% to 4% are new construction.

MARINE INSURANCE: Hurricane Frances' assault on Florida, although not as severe as Hurricane Charley's but longer lasting, seemed to cause more damage to boats around the peninsula because it took hours for lashing winds and waves to settle down, according to a boat association. Boats in Fort Pierce and Stuart, Fla., probably suffered the most damage, said Carroll Robertson, vice president of claims for Boat U.S., a national boat-owners association that offers yacht insurance through CNA Insurance Cos. to its members. Hurricane Frances hit an area of Florida where more lavish, expensive boats are located, including Ivana Trump's boat, Robertson said, adding that Boat U.S. doesn't insure her boat. Some of the boats in the area can cost $10 million to $30 million or more, she said.

BUSINESS INTERRUPTION COVERAGE: Paul McVey, managing director of property claims practice for Marsh Inc., the nation's largest insurance brokerage, said changes in deductibles have manifested themselves in business-interruption coverage, which generally is based on a percentage of gross earnings value, sometimes in concert with time deductibles of 24 or 48 hours in service-interruption coverage. Among the businesses reporting the biggest interruption hits from Charley was Tampa-based Outback Steakhouse Inc., which maintains 12.5% of its branch locations in Florida. According to Outback, the company lost about 130 operating days and between $1.8 million and $2 million in revenues through Aug. 17 because of mandatory evacuations and a lack of power and water in Florida and parts of North Carolina and South Carolina.

CATASTROPHE BONDS: Used to supplement reinsurance coverage at high excess-of-loss levels in high-risk areas, catastrophe bonds have been issued by several insurers and reinsurers for Florida hurricane risks.

According to a report by Marsh & McLennan Cos.'s MMC Securities unit, as of year end 2003, the most recent cat bonds issued included Residential Re 2002, the latest in a yearly series issued by insurer USAA Group, covering $125 million in hurricane risk for the East and Gulf Coasts and Hawaii. Swiss Re's SR Wind bond, issued in 2001, covers windstorm risks in Florida and Puerto Rico, at $58.2 million each. Zurich Re--now Converium--issued the Trinom Ltd. cat bond in 2001, covering $60 million in Florida and Gulf Coast hurricane risks. Also in 2001, American Re issued Gold Eagle II, covering $116.4 million in hurricane risks for Florida and the Gulf Coast. In 2000, Munich Re issued its Prime Capital I bond, covering $168 million in hurricane risks for Miami and New York.

Chris McGhee, a managing director with MMC Securities, said that to his knowledge, no cat bonds have been triggered by Charley. "As an event, Charley is not likely to be of a size to cause major losses to catastrophe bonds," he said.

Top 5 Fla. Commercial
Multi-Peril Writers--2003

Group market share rankings are
based on direct premiums written.

Zurich/Farmers Group    13.7%
ProAssurance Group       7.5%
Hartford                 7.4%
Insurance Group
Nationwide Group         6.9%
Travelers Property/      5.8%
Casualty Group

Note: Table made from bar graph.

Source: A.M. Best State/Line data

Top 5 Fla. Homeowners Multi-Peril
Writers--2003

Group market share rankings are
based on direct premiums written.

State Farm Group             23.7%
Allstate Insurance Group     11.5%
USAA Group                    5.3%
Nationwide Group              5.1%
HDI U.S. Group                4.3%

Note: Table made from bar graph.

Source: A.M. Best State/Line data

Top 5 Most Costly Catastrophes, U.S.

Rank    Date          Peril

 1      Sept. 2001    WTC, Pentagon Terrorist Attacks (2)
 2      Aug. 1992     Hurricane Andrew
 3      Jan. 1994     Northridge, Calif. Earthquake
 4      Aug. 2004     Hurricane Charley
 5      Sept. 1989    Hurricane Hugo

             Insured loss
             ($ millions)

        Dollars             In
           When           2002
Rank    Occured    Dollars (1)

 1      $20,300        $20,620
 2       15,500         19,874
 3       12,500         15,173
 4        7,400
 5        4,195          6,086

(1) Adjusted to 2002 dollars by the Insurance Information Institute

(2) Property coverage only

Source: Insurance Services Office, Inc. (ISO); Insurance Information
Institute