Analysts say losses may rise to multibillion-dollar level

Less than 24 hours after Hurricane Jeanne hit Florida, insurance companies already were predicting losses in the billions of dollars from the state’s fourth major storm this season.

The first three hurricanes -- Charley, Frances and Ivan -- caused as much as $16 billion in insured losses, according to industry estimates.

Jeanne could cost insurers between $4 billion and $7 billion, according to storm modeler Eqecat Inc., which made its estimates before the latest hurricane made landfall in southeastern Florida late Saturday.

However, insurance executives cautioned that it could be weeks before insurers have a good handle on the extent of the property losses from Jeanne.

“It’s still too early to tell, but it’s probably going to be another multiple-billion loss,” Sam Miller, vice president of the Florida Insurance Council, said Sunday.

Property Claim Services, which collects data for the insurance industry, estimated last week that Hurricane Frances caused $4.1 billion in insured losses when it hit over Labor Day weekend.

Combined with $6.8 billion in estimated insured losses from the first hurricane, Charley, and $3 billion to $5 billion in losses from Hurricane Ivan earlier this month, total losses from the three hurricanes could reach $15.9 billion, Property Claim Services said.

A more precise estimate of Ivan’s damage should be available sometime this week.

State Farm, the state’s largest insurer, expected to begin gathering information on the extent of the damage to its customers’ homes today, said spokesman Tom Haggerty.

Power and phone outages likely will make it difficult for many people to contact State Farm for days in the hardest-hit areas of the state, he said.

Still, State Farm surveyors would begin assessing the damage for themselves once the roads were deemed safe, Haggerty said.

Allstate had 2,000 adjusters ready to begin assisting homeowners with damage from Jeanne, said Deb Clouser, an Allstate spokeswoman. The company brought in adjusters from other states and as far away as Canada, she said.

Homeowners who had damage should contact Allstate as quickly as possible to help the company pinpoint the hardest-hit areas, she said.

The state’s major commercial insurers have enough financial resources to pay the 1.5 million claims filed from the first three hurricanes and the thousands more that are expected to be filed from Jeanne, the Insurance Council’s Miller said.

Some small insurers, however, may not have the ability to handle a fourth storm, he said. But if that occurs, their customers’ claims would be paid by the Florida Insurance Guaranty Association, which is funded by the state’s insurance industry and pays claims for insolvent insurers.

“There might be a handful of smaller companies that might be in serious trouble,” Miller said.

Florida’s insurance industry has been protected from massive losses by several measures passed by the Florida Legislature in the years after Hurricane Andrew struck in 1992. Andrew resulted in damages of $20 billion (in 2004 dollars) and is still the costliest hurricane in history.

Lawmakers created the Florida Hurricane Catastrophe Fund to reimburse insurers for losses that exceed $4.5 billion for a single storm. It also created Citizens Property Insurance Corp., a state insurance pool for high-risk properties that commercial insurers would no longer cover.

Insurers also were given permission to charge special hurricane deductibles to help minimize their losses. The deductibles range from 2 percent to 5 percent of the value of an insured home. It is uncertain whether Citizens will fare as well as major commercial insurers. Last week, Citizens officials said the company had enough money to pay an estimated $1.3 billion in claims from hurricanes Charley, Frances and Ivan.

But some insurance experts have speculated that Jeanne could push Citizens into the red, triggering a special assessment on residential and commercial property insurance policies throughout the state.

Greg Groeller can be reached at ggroeller@orlandosentinel.com or 407-420-5471.