Joplin tornado may cost insurance companies up to $2 billion

Joplin Tornado Damage StatisticsDirector John M. Huff from the Missouri Department of Insurance announced that the EF-5 tornado in Joplin may have been the “largest insurance event” in the history of the state, and it will cost insurers up to $2 billion in payments.

As a result of the tornado that hit Joplin on May 22, 2011, insurance companies have already made payments of over $500 million on the resulting claims. That total is expected to grow, and some experts – including Huff – are predicting that the final number will be three to four times its current amount. Huff explained that “This is half a billion dollars already reinvested into the local economy, and we expect it to be three to four times that amount by the times all claims are settled.”

On June 30, the Missouri Department of Insurance revealed that insurers had reported having already received 14,910 claims from vehicle, homeowners, and commercial insurance policies up until that date. The amount already paid on those claims had reached $509 million.

That said, the state insurance department also noted that insurers had expressed their expectation that the number of claims connected to the Joplin tornado should reach almost 17,000. Moreover, it is also believed that among the claims that have already been received by insurers, many are likely only to have been partial, and it is quite probable that much more money will need to be paid on them.

Huff has stated that the final totals for the payouts will likely be within the range of $1.5 to $2 billion, making it the highest insurance payout in the state’s history.

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