This week’s tornadoes in central Alabama came on the heels of a record-breaking year for catastrophes in the United States.
Ten tornadoes touched down Monday in several counties, including north of downtown Birmingham in Jefferson County where two people were reported dead, says Alison Ray King, director of communications and member services for the Alabama Independent Insurance Agents (AIIA). In Jefferson County, damage is so far estimated at $15 to $30 million.
In 2011, 242 tornadoes occurred in Alabama, according to the Insurance Information Institute. Among those was an outbreak last spring that left more than 250 people dead.
Last year was also the most expensive in the state’s history for insured natural catastrophe-related claims, III President Robert Hartwig says in a statement. Property-casualty insurers paid $3.2 billion to nearly 175,000 owners of homes and businesses damaged by storms.
What does that mean for property insurance rates?
“I would not be surprised to see a 25% to 30% increase,” Ted Kinney, AIIA director of education and technical affairs, says in an email.
In the state’s southern coastal counties, property insurance rates increased by greater percentages after Hurricane Katrina in 2005, he says. In addition, policies were non-renewed and windstorm coverage was difficult to obtain.
Now, because of last year’s storms, the problem of non-renewals and windstorms exclusions have moved north and are more widespread in the state, Kinney says.
Policyholders likely have not seen a hike in their premiums yet because rates first need to be filed with the state’s Department of Insurance for approval, he adds.
“They don’t want insurance to become totally unaffordable,” he says. And while Kinney says he hasn’t heard of any insurance companies that are looking to leave the state, he notes that “companies can’t continue to experience catastrophe losses without reconsidering their presence here.”
Meanwhile, tornadoes in Alabama are less common in January compared to other times of year, Ray King says in an email.
“But the unusually warm weather is setting up the right conditions for the violent, deadly storms,” she adds.
Ray King also notes it’s essential for people to have weather radio and smartphone apps to stay in tune with the latest conditions. She says that’s especially true in cases like this week’s storm, when tornado sirens rang in the early morning while many were asleep.
“Tornadoes come quickly, with unpredictable patterns, almost bouncing without logic—it just takes a matter of seconds to save yourself and your family from one, or to miss a chance to get to safety,” she adds. “That’s why the weather radios and [phone] applications are so important.”
Victoria Goff (victoria.goff@iiaba.net) is IA online editor.
Homes in central Alabama are damaged by Monday's storm. The last photo is of a mobile home. Independent insurance agent Brian Smith of Best Insurance Agency in Trussville, Ala., took these photos on Wednesday.
