Report on Dallas tornado insurance claims
Several powerful tornadoes cut a swath of destruction in the Dallas-Fort Worth area of Texas this week. The tornadoes caused a significant amount of damage to homes and businesses in the area but no death has been reported thus far. Claims adjusters have been streaming into the state from companies like Nationwide and Allied Insurance to help process the claims generated by the disaster. Insurers and state officials are encouraging all those that have storm-related claims to get in touch with an agent and file their claims as soon as possible to ensure expedient service and assistance.
Initial estimates from the Texas Department of Insurance suggests that the damage caused by the tornadoes could cost hundreds of millions of dollars. There are no concrete reports as to the exact cost of the disaster as of yet as insurers and modeling firms are continuing to assess the extent of the damage. Because of the ongoing natural disasters that the state has been struggling with in recent months, such as the continuous drought unabated wildfires, consumers have expressed concern over the ability of insurers to pay for claims and how the tornadoes could affect premiums.
Sandra Helin of the Southwestern Information Service, an insurance information firm with 50 years of experience, notes that consumers should not be worried about whether insurance companies will be able to pay claims. Helin is drawing attention to regulations set up by the state’s Department of Insurance which require insurance companies to be financially solvent enough to handle the claims generated by natural disasters. These regulations are meant to stop insurance companies from raising premiums by removing the necessity of the practice. Reinsurance may be an issue, however.
Insurance companies rely on reinsurance to manage risk and recover from losses. Reinsurance rates typically rise after a natural disaster. These higher rates can have a trickle-down effect on insurance policies as insurers attempt to account for higher reinsurance rates. Helin believes that most of the state’s insurers will not face excessive rate increases and that consumers will not likely see higher premiums for their coverage. This may change, however, as reinsurance is different from company to company.