ATLANTA — The winter storms that struck Georgia in January and last week have each triggered $25 million in claims so far, Insurance Commissioner Ralph Hudgens announced Tuesday while predicting costs for the latest one would likely rise.
At the same time, one economist figured the lost business could have totaled as much as $100 million over a combined five days.
All of those estimates totaling as much as $185 million sounds like a lot of money, but economists say the impact on the overall state will be relatively slight. Some sectors such as tow-truck operators and tree-removal companies profited while restaurants and airlines didn’t.
“What one sector lost, the other gained,” said Rajeev Dhawan, the director of the Economic Forecasting Center at Georgia State University.“It’s a definite hit to the hospitality segment, especially in the Augusta area,” he said.
While the timing of grocery or other purchases might have changed briefly because of the interruption of the storms, most people still wound up spending the same as planned, he said. And since most Georgians are salaried, their income didn’t suffer. However, no one is going to eat an extra restaurant lunch to make up for one skipped during the storm, and those workers are paid by the hour.
He said the loss to the state’s $16 billion hospitality sector could be as much as $100 million, although he admits he was basing his guess on limited information. Even at that amount, it would cause the tiniest ripple on the state economy that is as big as $433 billion.
Jeff Humphreys, the director of the Selig Center for Economic Growth at the University of Georgia, said it’s easy for the public to overestimate the financial impacts of a winter storm.
“They were minor relative to a hurricane. They don’t cause all too much short-term or long-term interruptions. They are a non-event from an economic standpoint,” he said. “They do impact individuals.”
For those individuals, the impact of the first storm was mostly to their cars while their homes took the brunt of the second storm in the form of burst pipes and crashing tree limbs, according to Justin Tomczak, a spokesman for State Farm, the largest insurance company doing business in Georgia.
“There was much higher level of preparedness, both from the personal as well as the official response, in the second storm,” he said.
Hudgens said not all insurance companies have reported to his office, and many property owners still haven’t contacted their insurers.
“Data collected by insurance adjusters are now reaching my office,” he said. “We anticipate that figure to rise as new claims are reported.”
The commissioner’s spokesman said Hudgens expects claims for this month’s storm to reach as high as $35 million.
It is not easy to estimate winter-storm damage the way a localized tornado can be. The problems from falling trees and frozen plumbing are widespread and impossible to spot from an inspection tour the way wind damage can be.