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INSURANCE INFORMATION INSTITUTE
Contact: Press Offices
New York: 212-346-5500; media@iii.org
Washington, D.C.: 202-833-1580

NEW YORK, December 22, 2008 — Preoccupied with the economic downturn and the U.S. presidential election, many Americans were unaware of the severe hurricanes and frequent tornadoes that caused billions of dollars in insured losses nationwide this year, according to the ̽����ѡ Information Institute (I.I.I.).

Property/casualty insurers paid $24.9 billion to policyholders for losses incurred through the first nine months of 2008, ISO’s found.

There were 16 named storms this Atlantic hurricane season, making 2008 the year with the fourth-highest number of named storms since such records started being kept in 1944. Nine of the named storms became hurricanes, three of which made landfall in the U.S.: Dolly (Texas, in July); Gustav (Louisiana, in September); and Ike (Texas, also in September). The three U.S. hurricanes combined produced more than $11 billion of the $24.9 billion in insured losses for the year between January and September 2008.

The (NOAA) said that this is the tenth hurricane season in the past 14 years to produce above-normal storm activity in the Atlantic Ocean.

Hurricane Ike was the year’s most costly natural disaster, with an estimated $10.6 billion in insured losses, making it the fifth-most expensive (in 2008 dollars) hurricane and the seventh costliest insurance event in U.S. history, the I.I.I. reported.

Disaster losses along the coast are likely to escalate in the coming years, in part because of huge increases in development. It is predicted that catastrophe losses will double every decade or so due to growing residential and commercial density and the cost of rebuilding expensive properties.

Moreover, this year has been one of the deadliest U.S. tornado seasons in more than a decade. The average annual number of tornado-related deaths nationally for the 10 years, 1997-2006, was 62. Yet more than 120 people have died to date in U.S. tornadoes in 2008. About 1,000 tornadoes occur annually but at least 1,600 tornadoes struck the U.S. through the first nine months of the year, according to NOAA’s National Weather Service. The number of tornadoes in 2008 may rival the record set in 2004, when more than 1,800 twisters were reported.

“Strong winds can adversely impact those who live far from the coastline so there is always a need for homeowners to reassess their insurance coverage and strengthen their properties,” said Michael Barry, vice president, Media Relations for the I.I.I. “Just because a part of the country is deemed as being at low risk of natural disasters does not mean there is no risk at all.”

Significant wildfires and extensive flooding also took place in 2008, and they pose challenges which are different from those generated by hurricanes and tornadoes. California saw about 1,900 square miles destroyed in 2008 due to one of its driest springs on record that caused more than 2,000 wildfires during the summer months.

Nationwide, the wildfire problem is a growing one for homeowners and property insurers because residential populations have increased dramatically in wildfire prone areas known as wild land urban interfaces (WUI). Most WUI’s are situated in the western states.

“Climate studies suggest warmer and drier weather is extending the length of the wildfire season, leaving forests that are clogged with dead and dying trees even more vulnerable to fire,” Barry explained.

Meanwhile, states along the Mississippi River had the exact opposite problem, with heavy rains in the spring and summer causing the river to overflow and subsequent flooding in states such as Iowa and Missouri.

Less than 20 percent of all Americans have a flood insurance policy even though 73 percent of those surveyed nationally this year by the I.I.I. said they are aware that a standard homeowners insurance policy will not cover them for flood-related losses.

“Insured catastrophe losses in 2008 exceeded all cat losses incurred in 2006 and 2007 combined," said Barry. “Large-scale weather events have widespread repercussions that last long after the media attention fades. When disaster strikes, however, insurers fulfill their role as the nation’s economic first-responders, and this year was no exception.”

Facts and figures about hurricanes are available at: Facts and Statistics: Hurricanes. For a detailed background paper on catastrophes and insurance issues, see Issues Updates: Catastrophes.

For more information about insurance, go to the .

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.