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PROPERTY CLAIMS SERVICES ESTIMATES INSURED PROPERTY DAMAGE FROM MIDWEST STORMS JULY 8-16 AT $375 MILLION

 RAHWAY, N.J., July 29 /PRNewswire/ -- The storms that have ravaged the Midwest caused an estimated $375 million in uninsured property damage July 8-16, according to Gary R. Kerney, director of catastrophe services of the Property Claim Services (PCS) division of the American Insurance Services Group (AISG).
 This brings the total cumulative effect of the four separate catastrophes from the Midwest floods (June 17-July 16) to an estimated $655 million, said Kerney.
 The areas incurring the greatest insured property damage were: Iowa, Missouri, Nebraska, Kansas, North Dakota, Minnesota, Illinois and Ohio.
 PCS defines a catastrophe as any event that causes at least $5 million in insured property damage and that affects a significant number of policyholders and insurers.
 Claims from most areas involve light to moderate damage caused by strong winds and hail. Although numerous tornadoes touched down during the period, they generally caused only localized damage.
 A large part of the insured loss, however, is attributable to flooding and the back-up of sewers and drains. While coverage for damage caused by the back-up of sewers and drains is provided by some insurers for residential risks, much of this coverage applied to commercial risks.
 A number of personal lines claims for damage from back-up have been reported from Fargo, N.D. Heavy rains and flooding along the Red River reportedly overwhelmed the local sewerage system. Reports of similar claims from other areas are limited.
 A significant factor in PCS estimates is the insured loss to commercial and industrial risks caused by flooding or the back-up of sewers and drains. Losses to buildings where coverage is provided against these perils are significant in many cases. The loss insured under these coverages was particularly pronounced in and around Des Moines, Iowa.
 Flooding along the Raccoon River in Des Moines inundated some areas in and around the city. The fast-rushing river water also created what had been termed "water damming" or sewerage outfall pipes. The river water rose above the level of the discharge pipes, and the speed of the passing water precluded the sewer pipes from discharging their contents, which then backed up through the system and invaded buildings. Similar losses have been reported in other cities, including Kansas City and St. Louis.
 Loss estimates do not include uninsured property, uninsured publicly-owned property and utilities, agriculture, aircraft, and property insured under the National Flood Insurance Program or the Write-Your-Own Program. The estimate also excludes loss adjustment expense.
 Catastrophe serial number 61 was assigned by PCS.
 -0- 7/29/93
 /CONTACT: Loretta Worters of PCS, 212-669-9200/


CO: Property Claims Services ST: New Jersey IN: INS SU:

WB-MG -- NY127 -- 7491 07/29/93 17:53 EDT
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Publication:PR Newswire
Date:Jul 29, 1993
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