I.I.I. – Historic Carolina Hurricane In 1989 Ushered In New Era of Catastrophic Storms

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NEW YORK, August 23, 2011 – While the path of Hurricane Irene is uncertain this week, one possible target is the Carolinas, which incurred historic damage from Hurricane Hugo in 1989.

Insurance companies paid nearly $4.2 billion (more than $6.7 billion in 2010 dollars) in claims for property damage caused by the storm, making it the most costly catastrophe in the history of insurance at the time, according to the Insurance Information Institute (I.I.I.).

Hurricane Hugo, which made landfall near Charleston, S.C., heralded the next two decades of record catastrophic losses for the insurance industry beginning with the $15.5 billion in insured losses from Hurricane Andrew in 1992 ($22.7 billion in 2010 dollars) and culminating in the $41.1 billion in insurance claim payouts ($45.8 billion in 2010 dollars) from Hurricane Katrina in 2005�which remains the most costly natural disaster to date in terms of insurance claims.

“In the 22-year period since Hurricane Hugo, insurance companies have paid out nearly $400 billion in property damage claims to help people recover from hurricanes, tornadoes and other catastrophes,” said Dr. Robert Hartwig, I.I.I. president and an economist. “The combination of population growth in coastal areas and a period of more frequent and severe storms increases the likelihood of even more catastrophic damage in the future.”

Dr. Hartwig added that in spite of the high level of losses from recent disasters, the industry remains financially strong.

        Estimated insured loss (1)
Rank Date Location Hurricane Dollars when
In 2010
dollars (2)
1 Aug. 25-30, 2005 AL, FL, GA, LA, MS, TN Katrina $41,100 $45,481
2 Aug. 24-26, 1992 FL, LA Andrew 15,500 22,412
3 Sep. 12-14, 2008 AR, IL, IN, KY, LA, MO, OH, PA, TX Ike 12,500 12,735
4 Oct. 24, 2005 FL Wilma 10,300 11,398
5 Aug. 13-14, 2004 FL, NC, SC Charley 7,475 8,548
6 Sep. 15-21, 2004 AL, DE, FL, GA, LA, MD, MS, NJ, NY, NC, OH, PA, TN, VA, WV Ivan 7,110 8,130
7 Sep. 17-22, 1989 GA, NC, PR, SC, VA, U.S. Virgin Islands Hugo 4,195 6,678
8 Sep. 20-26, 2005 AL, AR, FL, LA, MS, TN, TX Rita 5,627 6,227
9 Sep. 3-9, 2004 FL, GA, NY, NC, SC Frances 4,595 5,254
10 Sep. 15-29, 2004 DE, FL, GA, MD, NJ, NY, NC, PA, PR, SC, VA Jeanne 3,655 4,180

(1) Property coverage only. Does not include flood damage covered by the federally administered National Flood Insurance Program.
(2) Adjusted for inflation through 2010 by ISO using the GDP implicit price deflator.
Source: ISO’s Property Claim Services (PCS) unit.

About I.I.I.

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