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HURRICANE ANDREW INSURED DAMAGES IN FLORIDA RISE TO AN ESTIMATED $10.2 BILLION

 HURRICANE ANDREW INSURED DAMAGES IN FLORIDA RISE
 TO AN ESTIMATED $10.2 BILLION
 DAMAGE ESTIMATE IN LOUISIANA UNCHANGED;
 TOTAL STORM INSURANCE PAYOUT NOW PEGGED AT $10.7 BILLION
 RAHWAY, N.J., Oct. 21 /PRNewswire/ -- Property-casualty insurance companies will pay an estimated $10.2 billion in claims to victims of Hurricane Andrew in Florida, nearly $3 billion more than the preliminary estimate of $7.3 billion.
 The revised estimate was released today by Gary R. Kerney, director- catastrophe services, Property Claim Services (PCS) division of American Insurance Service Group, Inc.
 The revised estimate is based on a survey of insurance companies which collectively write more than 80 percent of the personal and commercial lines premium volume in Florida. The results portray the number of claims reported and expected, and the dollars reserved by insurers to pay claims.
 The preliminary PCS estimate was developed from ground and aerial surveys of the extent and severity of property damage, independent of insurance company projections.
 The survey confirmed the PCS original estimate of $500 million of insured property loss in Louisiana caused by Hurricane Andrew, bringing the combined estimated claims payments fir Florida and Louisiana to $10.7 billion, up from the preliminary estimate of $7.8 billion issued on Sept. 2.
 PCS originally estimated that approximately 685,000 claims would be reported in Florida and another 200,000 in Louisiana as a result of Hurricane Andrew. Data provided by the insurance carriers would indicate an expected volume of 167,000 claims in Louisiana and at least 610,000 in Florida.
 "Although the latter figure is expected to rise as people return to Florida to open their homes for the winter, we do not expect the increase to alter materially the estimated dollar payout," Kerney said.
 Kerney estimates that more than 500,000 claims from Florida have been reported to insurance companies.
 Kerney attributes the rise in estimated claims payments to several factors. Chief among them was the period of heavy rain in south Florida which prevented many people from making temporary repairs and inhibited salvage efforts. This compounded the original damage caused by the hurricane.
 Also, the public and insurance companies are experiencing a significant increase in the prices of building materials and a scarcity of licensed contractors in Florida, with little competition for work. Both factors cause higher costs on claims than would be anticipated initially, Kerney said.
 In addition, delays in the process of inspection and issuance of building permits resulting from the overwhelming number of applications ultimately reduce savings from repair or salvage and further increase claims costs, according to Kerney.
 The situation in south Florida is still fluid, Kerney said, and the impact of the cost increase factors may not be fully measurable at this time. "PCS will continue to monitor company claims experience and will adjust its insured loss estimate if necessary," Kerney said.
 He explained that the factors leading to the revised loss estimate in Florida were not present in Louisiana where the loss estimate is unchanged.
 The PCS estimate includes insured losses to dwellings, commercial properties, businesses, vehicles and boats. The estimate does not include uninsured damage to government and military facilities or other public property; utility equipment, such as power lines; the cost of emergency services and economic losses, such as crop damage and lost taxes.
 The revised estimate means estimated insured catastrophe losses to date in 1992 total more than $16 billion.
 -0- 10/21/92
 /CONTACT: Gary Kerney of Property Claim Services, 908-388-5700, or Jeanne Salvatore of Insurance Information Institute, 212-669-9241, for Property Claim Services/ CO: Insurance Information Institute; Property Claim Services ST: Florida, New Jersey IN: INS SU:


KD-SM -- NY035 -- 2819 10/21/92 11:12 EDT
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Publication:PR Newswire
Date:Oct 21, 1992
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