Insurance companies still tallying cost of hurricanes

David J. Phillip, File/Associated Press Floodwaters from Harvey rise in Houston Aug. 29. Allstate expects $593 million in insurance losses for August due to Hurricane Harvey. That marks a spike from $181 million in July. The estimates don’t include September figures for Hurricane Irma.

NEW YORK — Allstate expects insurance losses of about $593 million in August after Hurricane Harvey left a path of destruction along the Gulf Coast.

 

The initial accounting Thursday follows warnings from other insurers tallying the damages from a hurricane season that is nowhere near being over.

Allstate’s monthly losses, which likely have not been fully accounted for, are more than three times the $181 million recorded in July before hurricanes devastated islands in the Atlantic and began to strike the U.S.

Harvey made landfall in Texas Aug. 25. More than half the losses from that storm are related to vehicle damage.

The insurer, based just outside of Chicago, says that because of widespread damage and the inability of people to get to their homes or cars, its estimated losses may grow. Hurricane Irma slammed into Florida this month and Allstate has not released its estimates for that storm.

Last week, German reinsurer Munich Re, which covers losses from insurers, was the first to warn that it may not meet previous financial goals following the one-two punch of Harvey and Irma, which made landfall in Florida Sept. 8.

Others have issued more pessimistic outlooks. Travelers Companies Inc. suspended plans to buy back its own stock in order to raise cash. German reinsurer Hanover Re, like Munich Re, said it could miss profit targets.

The Insurance Council of Texas, the nation’s largest state insurance trade association, estimates overall insured losses from Harvey at nearly $19 billion. That includes an estimate from the Federal Emergency Management Agency in which Harvey’s flooding will result in $11 billion in payments to homeowners with flood insurance. Those flood losses would be the second-highest on record, trailing only Hurricane Katrina’s $16 billion.

Harvey flooded a vast area stretching from Houston to the Louisiana border. The storm caused 70-plus deaths and damaged or destroyed over 250,000 homes and hundreds of thousands of automobiles.

Irma carved a path of destruction through the Caribbean and then enveloped Florida. CoreLogic, a property data company, expects damage to commercial and residential property from Irma to range from $42.5 billion to $65 billion. That includes insured and uninsured losses.

The hurricane season runs through November.

 

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