State Farm makes initial Fran damage estimates.

BLOOMINGTON, Ill.--(BUSINESS WIRE)--Sept. 9, 1996--State Farm Insurance Companies, the nation's largest insurer of homes and cars, expects to pay about $150 million in claims for damage from Hurricane Fran, the insurer announced today.

Estimates are very preliminary because the damage is spread over hundreds of miles, primarily in North Carolina, and weekend damage assessments were affected by power outages and flooding. Also, many area were not yet accessible because of safety concerns.

About 600 specially trained disaster claim representatives from around the country are on duty, working out of more than a dozen field claim offices set up throughout the stricken area. These have joined 1,600 claims people and agents who live and work in North Carolina and Virginia.

With an estimated 35,000 home and business claims for $125 million and 10,000 auto claims totaling an estimated $25 million, the expected toll is about one-third as costly to State Farm as was Hurricane Hugo ($480 million), which smashed South Carolina and North Carolina in 1989. Yet, the estimated payout is more than 10 times greater than the $12 million spent so far for Hurricane Bertha, which hit mainly in North Carolina in July.

While the estimates are subject to changes, they indicate this would be the sixth most costly hurricane in State Farm history, trailing not just Andrew in Florida in 1992 and Hugo but also Iniki in Hawaii in 1992, Opal in Florida/Alabama/Georgia in 1995 and Alicia in Texas in 1983.

``This was a bad storm, particularly in terms of lives lost, but it could have been a lot worse in terms of property damage,'' said State Farm Claims Vice President Frank Haines. ``We are glad that it was not -for the sake of local residents, including our customers there. We're also pleased that the hurricane didn't cause heavier damage that could have impaired our financial condition already affected by seven years of unprecedented catastrophe losses.''

Twenty-one of State Farm's 25 most costly disasters have occurred since 1989, with Andrew causing $3.7 billion in claims paid and the Northridge earthquake in California in 1994 resulting in $2.9 billion in losses. State Farm policyholders should contact their State Farm agent immediately to report their claims. Those in North Carolina, Virginia and South Carolina unable to reach their agent should call 1 800-SF-CLAIM (1-800-732-5246).

STATE FARM INSURANCE: FRAN ADVISORY

State Farm Insurance has set up mobile claim centers at three locations in the Hurricane Fran damage area. Policyholders may visit them for immediate assistance. Reporters and photographers are also welcome.

Mobile claim center locations:

Jacksonville, N.C., at the intersection of Highway 17 and Western Avenue;

Raleigh, N.C., at the Old Raleigh Village Shopping Center at 3101 Duraleigh St. (near the Harris Teeter grocery store);

Wilmington, N.C., at the corner of Oleander and S. College.

Two additional mobile claim units are tentatively scheduled to be set up at the following locations within 24 hours: Garner, N.C., in the K-mart parking lot on S. Saunders; and in Wilmington, N.C., at the corner of Shipyard and S. College in the Long Leaf Mall parking lot across from Hoggard High School.

For more information, or to arrange interviews:

Contact Chris Brathwaite or Rock Jenkins via pager at 1-800-864-8444 or Mary Beth Cramer at 1-800-981-0085. (Backup assistance is available through State Farm's Corporate Public Affairs Department at 1-309-766-7550.)

We appreciate the media's continued help informing State Farm policyholders that they should report their claims to their State Farm agent. Those in North Carolina, Virginia and South Carolina unable to reach their agent should call 1-800-SF-CLAIM (1-800-732-5246). Policyholders in or near Jacksonville, Raleigh or Wilmington, N.C., can, of course, visit one of the State Farm mobile claim centers.

Claims information that will help policyholders, and the latest media advisory, is available on the catastrophe section of State Farm's Internet home page. The website address: http://www.statefarm.com.

CONTACT: State Farm Insurance Cos., Bloomington

Steve Vogel, 309/766-7550