State Farm, one of the nation’s largest insurance companies has released information regarding the cost of a number of weather-related catastrophes that have caused widespread damage this year. These disasters, coming in the form of floods, hurricanes and earthquakes, have taken a heavy toll on the insurance industry as a whole. Earlier in the year, State Farm attempted to mitigate the damage caused by an outbreak of tornados and hail storms that swept through the Eastern U.S. This past summer brought more trouble, however, with wildfires in Texas and tropical storms in the Southeast.
In all, the insurer has paid more than $5 billion to policyholders. The company has received more than 970,000 claims since the end of April. The number of claims coming in is expected to rise as more events occur through the remainder of the year and as consumers begin to understand the scope of the recovery effort. Typically, State Farm, as a whole, fields approximately 12 million auto, home and business claims each year. That number is set to be dwarfed by the disaster prone 2011.
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Other insurance companies are struggling with the pace of natural disasters as well. Earlier in the month, Allstate reported a loss of $500 million in the wake of Hurricane Irene. While Irene was not as powerful as had been predicted, the storm still showed the destructive powers of nature and how much of a risk it is to go without appropriate insurance coverage for such a storm.