Nationwide Expects Over $380 Million in Claims Due to Hurricane Charley

Strategic Insights -

Nationwide Mutual Insurance Co. is anticipating a significant number of claims and losses related to Hurricane Charley, which struck Florida as a Category 4 hurricane on August 13. The insurer, the fourth-largest writer of homeowners multiperil in Florida, expects over 50,000 claims with losses of approximately $380 million. This projection is based on data from the Florida Office of Insurance Regulation and the Insurance Information Institute, which estimates that the industry-wide losses from Charley will be around $7.4 billion, making it the second-costliest hurricane in U.S. history.

Key Takeaways:

  • Nationwide expects over 50,000 claims with losses of approximately $380 million due to Hurricane Charley.
  • The insurer is the fourth-largest writer of homeowners multiperil in Florida, with a 5.1% market share based on 2003 direct premium written.
  • As of August 21, Nationwide had received over 22,000 claims, with almost 800 large loss homeowners claims (losses of $25,000 or more) and 15,000 homeowners claims.
  • The majority of projected losses are in Florida, where Nationwide expects over 50,000 claims and $377 million in losses.
  • Nationwide's total loss projection from Charley is $380 million, said Kevin Craiglow, a company spokesman.
  • The insurer is responding first to those policyholders and communities that were hit the hardest, providing payment for immediate living expenses and property damage.
  • As of August 21, 8,000 checks had been issued to policyholders.
  • Industry-wide, Hurricane Charley is likely to cost insurers about $7.4 billion, making it the second-costliest hurricane in U.S. history, according to the Insurance Information Institute.
  • Nationwide's adjusters are working around the clock, seven days a week, with 650 employees supporting the effort.

Statistics:

  • Over 22,000 claims received by Nationwide during the past week.
  • Almost 800 large loss homeowners claims (losses of $25,000 or more) and 15,000 homeowners claims reported to Nationwide.
  • 8,000 checks issued to policyholders as of August 21.
  • $7.4 billion estimated industry-wide losses due to Hurricane Charley, according to the Insurance Information Institute.
  • $15.5 billion insured losses due to Hurricane Andrew in 1992 (latest comparison).

Sources:

  • "Nationwide Mutual Insurance Co. Estimates Over $380 Million in Claims Due to Hurricane Charley," A. M. Best Co., via COMTEX, August 23, 2004.
  • Insurance Information Institute, "Hurricane Charley Cost Estimate," BestWire, August 19, 2004.